Paul Sarver is the controller of a corporation whose stock is not listed on a national stock...

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Accounting

Paul Sarver is thecontroller of a corporation whose stock is not listed on a nationalstock exchange. The company has just received a patent on a productthat is expected to yield substantial profits in a year or two. Atthe moment, however, the company is experiencing financialdifficulties; and because of inadequate working capital, it is onthe verge of defaulting on a note held by its bank.
At the end of the mostrecent fiscal year, the company’s president instructed Sarver notto record several invoices as accounts payable. Sarver objectedsince the invoices represented bona fide liabilities. However, thepresident insisted that the invoices not be recorded until afteryear-end, at which time it was expected that additional financingcould be obtained. After several very strenuous objectionsexpressed to both the president and other members of seniormanagement Sarver finally complied with the president’sinstructions.
Please discuss:
Did Sarver actin an ethical manner? Explain & cite IMA's ethicalstandards.

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4.5 Ratings (960 Votes)

No Sarver didnt act as in an ethical manner Here he violated the integrity standard oin the IMAs ethical standardactually he is hiding the company s account payable inorder to attract outsiders or for other organizations needsits a window dressinghere he is engaging activity that would prejudice duties ethicaly IMA ETHICAL STANDARDS See Answer

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Paul Sarver is thecontroller of a corporation whose stock is not listed on a nationalstock exchange. The company has just received a patent on a productthat is expected to yield substantial profits in a year or two. Atthe moment, however, the company is experiencing financialdifficulties; and because of inadequate working capital, it is onthe verge of defaulting on a note held by its bank.At the end of the mostrecent fiscal year, the company’s president instructed Sarver notto record several invoices as accounts payable. Sarver objectedsince the invoices represented bona fide liabilities. However, thepresident insisted that the invoices not be recorded until afteryear-end, at which time it was expected that additional financingcould be obtained. After several very strenuous objectionsexpressed to both the president and other members of seniormanagement Sarver finally complied with the president’sinstructions.Please discuss:Did Sarver actin an ethical manner? Explain & cite IMA's ethicalstandards.