ACCT - Principles of Managerial Accounting Essay - 2

ACCT - Principles of Managerial Accounting - Essay Example Some decisions are taken to prevent worsening of situations in the short term, but these decisions may have negative implications in the long run. In the given case, the purchase of CD raw materials should be recorded in the current year expenses since the purchase is already complete on 15th November. Adjusting expenses and posting transactions as per accounting convenience is a regular practice within organizations. In this case the CFO’s instruction to post the expenses in the current year even though the material purchased will be used in the next financial year is justified since the purchase has already taken place in the current year. Hence the decision is morally justified and does not reflect unfair accounting practice. Moral and ethical decisions in such contexts do present challenges to accountants who are well aware of the unfair accounting practices. However, the primary challenge lies in the fact that opposing the CFO or senior management decision may have negative implications on accountant job security and employment conditions. Accounting frameworks and standards provide the essential parameters for fair practice. Any decision that goes against these standards or code of ethics for accountants must be opposed on grounds of possible negative implications in the long run. The job allocation process of the company involves allotting jobs to contractors on the basis of low cost and high quality. The two different categories of contractors involved in this process are the general contractors and the government contractors. It has been noticed that the bidding price of the government contractors involve a certain percentage of overhead that is added to the cost of production. The profit percentage is thus specified and this leverages the government contractors’ position in terms of distinct cost plus profits for jobs allocated. The general contractors thus find themselves at a disadvantage since they have to compete