INTRO

GROUP NAMES WITH PICTURE AND

ROLES
ADD NA LANG PO NG SLIDES SA DISCUSSION PU NG
MGA NAG ROLE PLAYYY HIHI THANKIEE MWUA
FINANCE DIRECTOR
INVENTORY
STOCKS (NINE MONTHS OLD)

PRESSURE TO OVERSTATE STOCK VALUATION

CLOTHING RETAILER:

NAG EEXPIRED BA ANG MGA DAMIT?

CONSUMER’S SIDE SELLER’S SIDE

YES! YES!
 BABYCAKES (Babaguhin pa po ata ito ni
Nicoleee hehe not sureee )
Cake’s Selling Price: P500
NUMBER OF STOCKS 10 P5,000 10 STOCKS X 500
NUMBER OF SOLD STOCKS 5 (2,500) 5 STOCKS X 500
NUMBER OF EXPIRED STOCKS 2 (1,000) 2 STOCKS X 2
TOTAL: STOCKS AVAILABLE 3 STOCKS (CORRECT VALUE) TOTAL: P1,500 CORRECT AMOUNT OF FS
NOTE: EXPIRED STOCKS OR INVENTORY
MUST BE WRITE-DOWN.

WHAT THE AUDITOR WANTS THE FINANCE DIRECTOR TO DO

NUMBER OF STOCKS 10 P5,000 10 STOCS X 500
NUMBER OF SOLD STOCKS 5 (2,500) 5 STOCKS X 500
NUMBER OF EXPIRED STOCKS 2 1,000 2 STOCKS X 2
TOTAL: STOCKS AVAILABLE 3 STOCKS (CORRECT VALUE) TOTAL: P3,500 WRONG AMOUNT
NOTE: EXPIRED STOCKS OR INVENTORY
WERE NOT WRITTEN-DOWN.
ETHICS – NICOLE
DILEMMA
ETHICS + DILEMMA = ETHICAL
DILEMMA
FUNDAMENTAL PRINCIPLES- NICOLE
QUESTION AND ANSWER – NICOLE
RELEVANT FACTS - CLOIE
STOCKS UNDER PRESSURE

SELF-INTEREST SYMPATHY
AFFECTED PARTIES – NICOLE
WHO SHOULD BE INVOLVED IN THE RESOLUTION – CLOIE
WAREHOUSE MANAGER MANAGING DIRECTOR
ROLE PLAYER PIC: ROLE PLAYER PIC:

BOARD MEMBERS EXTERNAL AUDITORS

SAFEGUARDS - NICOLE
QUESTION AND ANSWER
OPINION PER MEMBER – ALL
PRESSURE TO OVERSTATE STOCK VALUATION - CLOIE
SHOULD I WRITE DOWN THE EXPIRED INVENTORY?
YES!
THAT IS THE RIGHT THING TO DO.
REMEMBER MY ETHICAL PRINCIPLES!
BUT
I MIGHT LOSE MY WORK.
OTHERS MIGHT LOSE THEIR WORK TOO
THERE WOULD BE NO SALARY INCREASE
THERE WOULD BE NO POTENTIAL BUYER OF THE
COMPANY
NO!
IF I WON’T FOLLOW THE SHAREHOLDER’S
ORDER, I MIGHT LOSE MY WORK.
IF I WON’T FOLLOW THE ORDER, THE
PROSPECTIVE BUYER MIGHT NOT BUY THE
COMPANY.
IF I FOLLOW THE ORDER AND THE DEAL WILL BE
SUCCESSFUL, OTHERS WILL KEEP THEIR JOB AND
I WILL RECEIVE A SALARY INCREASE.
BUT
THAT IS NOT THE RIGHT THING TO DO.
MY ETHICAL PRINCIPLES WERE AFFECTED
NEGATIVELY
I MIGHT REGRET MY DECISIONS IN THE FUTURE
COURSE OF ACTION – CLOIE, PEDE RIN
MAG SALITA YUNG IBAAAAA HIHI
• TITLE NA LANG PO SIGURO PALAGAY DITOOO, THANKYOUU PO
Ensure to have sufficient information on why stocks are
slowly moving.

- Changing season - Tougher competition - Poor marketing strategy

International Ethics Standards Board
for Accountants :

SUBSECTION 111- INTEGRITY

SUBSECTION 112- OBJECTIVITY

SUBSECTION 113 – PROFESSIONAL

COMPETENCE AND DUE CARE
SUBSECTION 114 – CONFIDENTIALITY

Communicate with the warehouse SUBSECTION 115 – PROFESSIONAL

manager “I should make a detailed report” BEHAVIOR
What should be included
- Reasons of slow moving inventory
International Ethics Standards Board for Accountants :

in the report? SUBSECTION 111- INTEGRITY

SUBSECTION 112- OBJECTIVITY
SUBSECTION 113 – PROFESSIONAL COMPETENCE AND DUE CARE
SUBSECTION 114 – CONFIDENTIALITY
SUBSECTION 115 – PROFESSIONAL BEHAVIOR
- Correct way of accounting the “expired inventories” in the FS
International Ethics Standards Board for Accountants :

SUBSECTION 111- INTEGRITY

SUBSECTION 112- OBJECTIVITY
SUBSECTION 113 – PROFESSIONAL COMPETENCE AND DUE CARE
SUBSECTION 115 – PROFESSIONAL BEHAVIOR
-Opinion and report of other individuals (auditor, professional body, advisor
etc.)
International Ethics Standards Board for Accountants :

SUBSECTION 111- INTEGRITY

SUBSECTION 112- OBJECTIVITY

SUBSECTION 114 – CONFIDENTIALITY

SUBSECTION 115 – PROFESSIONAL BEHAVIOR
- Code of Ethics
Discussions with the managing
director and those people

+
involved may be made easier by
reference to the company’s own
code of ethics or conduct.

+
 Once you are sure about the facts, you should discuss the matter with the
managing director.

BUT… WHAT IF? I SHOULD THINK ON HOW I CAN RAISE

THE ISSUE WITH THOSE CHARGED WITH
GOVERNANCE.

CONFIDENTIALITY
CLEAR REASONINGS
POLICIES AND
PROCEDURES

International Ethics Standards Board for Accountants :

SUBSECTION 114 – CONFIDENTIALITY

SUBSECTION 115 – PROFESSIONAL BEHAVIOR
Next step is, I should consider
the need to follow up
meetings with email or other =
written correspondence to
record my points of view.

NOTE:

NOT EVERYONE IS
AVAILABLE , AND THAT
IS OKAY.
International Ethics Standards Board for Accountants :

SUBSECTION 111- INTEGRITY

SUBSECTION 115 – PROFESSIONAL BEHAVIOR
I might have to consider raising the
issue externally, for example alerting the
auditors to the existence of the slow-
moving stock. You should consider
discussing with a trusted advisor, e.g., a
colleague or your professional body.

AUDITORS COLLEGUE OR PROFESSIONAL BODY

International Ethics Standards Board for Accountants :

SUBSECTION 112- OBJECTIVITY

SUBSECTION 114 – CONFIDENTIALITY
SUBSECTION 115 – PROFESSIONAL BEHAVIOR
I can also talk to the higher authorities with those people who gave their opinion about the case like the
sales director, warehouse manager, auditors, etc. If those people are not available, then I can show to the
higher authorities my report with their opinion.

International Ethics Standards Board for

Accountants :

SUBSECTION 111- INTEGRITY

SUBSECTION 112- OBJECTIVITY
SUBSECTION 113 – PROFESSIONAL COMPETENCE
AND DUE CARE
SUBSECTION 114 – CONFIDENTIALITY
SUBSECTION 115 – PROFESSIONAL BEHAVIOR
If the situation remains unresolved, you may have to remove
yourself from the conflict.
NOTE: THIS WILL BE YOUR LAST
RESORT
“I resign”
You should document, in detail, the steps that you take in resolving your
dilemma, in case your ethical judgement is challenged in the future.
CLOSING – KHARS