Question A: What, if any, is the ethical issue involved in this case?

In this case, the ethical problem concerned here is fairness in the practice of financial

information. Organizations' financial statements should present financial statements keeping two

criteria in mind: Financial statements should present a true state of the company's finances and

they must also provide a fair view of the company's financial position. While the former focuses

primarily on the accuracy of the financial figures contained in the statement, the latter primarily

focuses on presenting the information in an unbiased manner. In relation to the case, by hiding

behind the old standards issued by the International Accounting Standards Board to present a

financial statement that presents the net income of the company in a better way than it actually is,

the financial manager is biased towards the company in a manner detrimental to the users of the

company's financial statements. The risk of biased financial reporting becomes more apparent

given the fact that the International Accounting Standards Board has published new standards

and encouraged companies to implement the standards as soon as possible. That is an act of

unfairness.

Question B: Is the financial vice president acting improperly or immorally?

The company's finance vice president acted unethically or immorally. Fairness in financial

reporting requires that corporate auditors or controllers provide as much information as possible

about the company's financial position in an unbiased manner. This should include issues such as

the scenario illustrated in the case above. Although the company financial vice president secured

his legal rights by insisting on submitting the company's financial statement according to the old

standard, the ethics in preparing financial reports also requires him to consider the interest of the

users of the company's financial statements. As well as the company's need to implement the

new standards issued by the International Accounting Standards Board as soon as possible.
Question C: What does Hoger have to gain by advocacy of early implementation?

Becky Hugger, as the controlling person of the company, is responsible for preparing the

financial statement for the company. Thus, the accuracy, fairness, and hence the utility of the

company's financial statements, depends on the efficiency of the company controller. Therefore,

by insisting that the new standards be implemented early, Becky Hogger deserves to be

commended for being an efficient observer performing the tasks expected of her. However, you

will not get any material gain or financial benefit.

Question D: Who might be affected by the decision against early implementation?

The decision not to implement the rules or standards early could affect creditors, potential

investors and other users of the company's financial statements. Specifically, the decision against

early implementation could cause creditors, potential investors, and the general public to make

inaccurate assumptions about the future financial condition of the company, causing them to

make incorrect investment decisions.