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Subject: Discussion Board 2 Author: Brennan Dearing Posted date: Wednesday, September 3, 2008 12:57:42 PM EDT Last modified date: Wednesday, September 3, 2008 12:57:42 PM EDT Total views: 7 Your views: 1

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One could assume the tough predicament surrounding the featured scenario is one of a stressful nature. Tamira is in a difficult situation to say the least: She can either obey her boss’ commands and have the annual financial statements completed, or she can object to the request and advise her boss that it cannot be completed accurately in the allotted time frame. Furthermore, there are also both ethical and moral infractions to be considered that go along with Tamira’s ultimate decision. No one other than Tamira can say what motives drove her to decide upon the course of action she chose, which could have been the result of previous experiences where it was understood no matter what timelines may affect a report it needs to be done when requested. It is not stated whether the falsification of expense accruals is a law breaking action, if so Tamira should have advised her boss that it was not possible for her to complete the assignment and if she received any adverse reactions it would then leave her boss and the company open to lawsuits. Another, more logical approach to the situation would have been for Tamira to produce two separate reports. The first report should contain all the accurate information completed up until the last area that can not be completed. The second report could be the one which Tamira originally submitted. This area could include the lower estimates so that there is not an incomplete report. Another course of action Tamira could have chosen was to have gone further than simply making up and adjusting figures by researching the past five years of entries in regards to the time frame specified and extracting an average of those numbers inserting them into the report. This option gives a complete report but instead of Tamira putting in false numbers, the employer has an accurate report with average entries of previous years. With both of these reports available, the option is left to the boss as to which report to use, if not both.

Unless one is in the situation that Tamira has been placed in, one can not accurately say how they would handle it. Many may try and state they would have done the right thing and advise the boss that the task was not possible given the time restraints. However, once again, it is not known what past history there was with this business and its dealings. It would be ideal to say that it would have been handled honestly and adequately but the pressure of the situation is what would dictate anyone’s decision. It is difficult to determine a proper course of action not knowing the exact nature of the business and whether or not the entries inputted by Tamira could influence the obtaining of loan financing. Moreover, not knowing if it is simply a matter of minor information so one can gain a brief overview of what the company is contending with, also makes it hard to state what would have been the best choice. Therefore, the best option is the route that

1. Identify several courses of action that Tamira could have taken instead of the one she took. There are a number of ethical considerations that come into play for this scenario. Tamira should have discussed the situation with the company president so that they could gameplan the best course of action to provide the most accurate details to the bank. Chances are he would have probably gotten upset with her, but would have sought to reschedule the meeting. The fact that she provided low estimates so that things did not look worse than they were is in itself an ethical violation, because she is practically lying to get the loan, no matter what he personal motives were. What would happen if the bank approves the loan based off of the information she provided and then defaulted a time later? Ultimately who would have had to answer for the false information? If the president did decide to press with the meeting then he should express to the bank the situation, and the best option would be to provide both a high end and low end estimate for them to view. Additionally, I wonder how much effort she was applying to maintaining up-to-date data. It sounds like she waited until the end of the period to start putting her data together versus keeping track and inputting the data in the various forms to make things easier and quicker when it came time to close everything out. She needs to re-examine how she manages the account and develop a better plan for the future incase such a scenario were to happen again. 2. If you were in Tamira's situation, what would you have done? Briefly justify your answer. This is an intersting scenario. I am currently going to school for the military and discussed a similar scenario in class based off of an immediate deadline established by the boss. Sometimes you just have to take your punishment when you make a mistake, and that is what I feel she has done. She did not properly plan and waited until the end to try and obtain all of the data instead of keeping continual track. I would have aproached the president with the news and offered him the various options that I could come up with; preferably rescheduling. Ultimately it is his call to make, but at the same time you must hold your honor. I would rather get in trouble for telling the truth than lie to avoid it. Chances are, eventually things like that catch up with you. 1. Identify several courses of action that could have been taken instead of the one she took. Tamira should have told her boss that the 24-hour deadline was not enough time to prepare an accurate financial statement. Once the time issue was communicated, her boss might have given her suggestions on how to obtain the information needed to accurately state the expense accurals. Tamira could have also suggested a second meeting or maybe even a reschedule of the first meeting, so that she may have time to prepare the financial statement. She could have also provided an unadjusted statement or a pro forma financial statement, that would give the what-if scenarios for both the low and high estimates she came up with. Tamira could have asked her boss if the financial statement was absolutely necessary for the dinner meeting, if not she could submit an unadjusted trial balance or unclassified balance sheet that would give a general picture of the company's financials, until she was able to compile the necessary source documents to make the required adjustments and postings to prepare and accurate financial statement. 2. If you were in Tamira's situation, what would you have done? Briefly justify your answer. If I was in this situation, I would have promptly told my boss that 24 hours would not be enough time to complete the financial statement. I would suggest presenting a pro forma financial statement that would depict the low and high estimates that I had came up with. If my suggestion was not what my boss had in mind, I would ask him if the meeting could be rescheduled to allow more time to complete his request.

1.) Identify several courses of action that Tamira could have taken instead of the one she took.

She knew from the beginning that she could not gather the necessary information, so instead of estimating the accruals, she could have sought the assistance of the person or persons in charge of the expense accrual accounts. Communicating with the expense account owner regularly and requiring that person or persons to keep their records up to date weekly would have prevented this last minute crunch. If there were no account owners to help, then she would certainly know where and to whom the expenses were paid. Phone calls to the recipient of those expenses to obtain summaries of what had been paid could have produced a quick and accurate summary. She could have requested from each recipient that they fax or email her a statement of their records so she would have back up for her report. She also could have communicated with the boss what she was up against. The boss may have told Tamira that this dinner meeting was just a preliminary meeting to discuss the project in general. Since the bank representatives are meeting with him at dinner they probably will not be making the final decision there and also probably will not require final statements and hard documentation. If the accuracy of the statements does need to be 100%, the boss himself may also be able to assist in helping Tamira obtain the necessary information to prepare the financial statements. Tamira also could have taken the route she did, but instead of overstating and making the statements look good, she could have provided the boss with a worst case scenario statement and informed him that she did not have all of the necessary information to prepare a better report. That could potentially backfire on her personally though as the boss may feel that he has been taken by surprise with this lack of information and portray her actions as irresponsible and lackadaisical.

2.) If you were in Tamira’s situation, what would you have done? Briefly justify your response.

In this situation I would have told my boss right then and there about what we were up against. I would have sought his advice on the best and quickest method of completing this task. I then would have taken his advice as much as possible and I would have gone the route of communicating with the recipients of the expense accruals and with the account owners or directors in charge of those accruals to obtain back up documentation. In the financial statement I would make note of any accrual expenses that had been estimated and by how much using a range of +/- whatever the amount may be. I would request from my boss that he meet with me at least four hours prior to the dinner so that he could review it and make any necessary changes, additions or subtractions. I would also provide the boss with the financial statement from the two years prior to this one as added back up which could help to solidify the current year. Being up front with ones obstacles and challenges is imperative. You never want to take your boss by surprise for any reason, that’s why I would have communicated with him right from the start. Gaining support from account owners or directors in charge of those accruals and/or the recipients of the expenses also is valuable in that more than one person has ownership interest in the final statement given to the boss. Back up documentation is also important in the event that there is any question about the financial statement being reviewed. This is the reason I would have included the prior two years statements. If the bank looks at what we have done over the last two years and compares that to the current year, as long as those numbers are on track you

should be fine. Also by stating in the report the specific accruals that may be + or – shows up front that you may have some further work to do in order to finalize the report and the final decision from the bank will be made pending receipt of those numbers. A final meeting with the boss four hours ahead with me would have given me a chance to get approval of the statement from the boss and to make any last minute adjustments that he may request. This process gives me a chance to walk him through exactly how we reached these results and in turn will enable him to speak intelligently with the bank about the report that he requested at from me at the last minute. Lastly before I let him go to dinner I would ask him when his next meeting with the bank is scheduled to take place and what further assistance he will need so I can begin to work on it TODAY. 1. Identify several courses of action that could have been taken instead of the one she took. 1. Undoubtedly she needs to inform her boss. Her boss could make suggestions on how to get more accurate figures.Also, her boss needs to know because he is the one ultimately responsible for the company and the loan he is taking out. The more informed her boss is as to how she reached the conclusion, the better off he will be representing them with the entire statement to the bank. 2. She should have used "high estimates" as opposed to "low estimates". If she uses the worst case scenario and they plan for the worse they will ultimately be better off than if they planned for the best and didn't take enough money out in the loan to properly fund the special building project. 3.She should have averaged the values over the last 10 years or so, therefore getting a more accurate prediction of what the current cost is as well as included charts showing the trends over time. This would help him be able to predict where they numbers will be up until Dec 31, 2007. 2. If you were in Tamira's situation, what would you have done? Briefly justify your answer. If I was in this situation I would inform my boss of the predicament that I am in and I would tell him that because of the short notice I am unable to make all the calculations needed. I would then ask for his advice. As my boss he needs to know because he is ultimately responsible and has experience that may be helpful in the situation. I would offer the boss my suggestions n averaging over a period of years and then using "high estimates" to help play it safe with worst case scenarios. Its important to ask for his advice because that would allow me to get the work done the way my boss prefers since he is responsible for it. Also, bringing it to his attention would make him more aware of the short notice he imposed and make him less likely to do it in the future.