Scribd
Upload
46 views1 page

Activity 1

The document discusses the ethical implications of manipulating financial records for tax avoidance, emphasizing that such actions are illegal and violate ethical accounting principles. The accounting officer expresses a commitment to uphold transparency and fairness, advising against unethical practices and suggesting lawful tax-saving strategies. If the owner persists in tax fraud, the officer may have an obligation to report the issue to regulatory authorities in accordance with the company's code of ethics.

Uploaded by

Marriane Olgena
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
46 views1 page

Activity 1

The document discusses the ethical implications of manipulating financial records for tax avoidance, emphasizing that such actions are illegal and violate ethical accounting principles. The accounting officer expresses a commitment to uphold transparency and fairness, advising against unethical practices and suggesting lawful tax-saving strategies. If the owner persists in tax fraud, the officer may have an obligation to report the issue to regulatory authorities in accordance with the company's code of ethics.

Uploaded by

Marriane Olgena
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Activity 1: To Record or Not?

 No, the action is unethical because it is a


form of tax avoidance through transfer
A. Will you comply with what the owner tells pricing manipulation. While ABC Co.
you to do? Why or why not? is legally tax-exempt, artificially
inflating the price of goods sold to XYZ
 No, I will not comply because Co. to reduce taxable income is
manipulating financial records to reduce deceptive. This violates ethical
taxable income is unethical and illegal. It accounting principles such as
constitutes tax fraud, which can lead to transparency, fairness, and integrity
penalties and legal consequences for and could lead to legal consequences if
both the business and its employees. The authorities determine that the pricing
Code of Ethical Conduct emphasizes scheme was intended to evade taxes.
honesty, integrity, and compliance with
tax laws and regulations. B. As the accounting officer of the two
companies, what will you do?
B. What will you say to the owner?
 As the accounting officer, I will follow
 I will professionally explain that the company’s code of ethical conduct,
recording false transactions to decrease which includes upholding transparency
taxable income is against the law and the and fairness. I will:
ethical principles of accounting. I would 1. Advise management that
also highlight the potential risks, charging an excessively high
including penalties, reputational damage, price to shift profits is an
and possible legal action. Instead, I unethical tax avoidance practice.
would suggest lawful tax-saving 2. Recommend compliance with
strategies that comply with regulations. fair market pricing for
transactions between ABC Co.
C. Will you report this to the authorities? and XYZ Co. to avoid legal risks.
3. Document my objections and
 If the owner insists on committing tax escalate the issue to higher
fraud despite being advised against it, I management or the board if
may have an ethical obligation to report necessary.
the matter to the appropriate regulatory 4. Follow the organization’s
authorities. The company’s code of whistleblowing policy if the
ethics and professional accounting unethical practice continues,
standards require accountants to act ensuring compliance with laws
with integrity and report fraudulent and ethical standards.
activities when necessary.
By adhering to the Code of Ethical Conduct, I
will uphold integrity in financial reporting and
prevent unethical tax manipulation.
Activity 2: Is This Ethical?
4o
A. Is the action of the Dela Cruz family
ethical? Explain.

You might also like