Question

Identify ethical issues in job costing.

Answer 1

Job costing basically evolves around assigning cost to various jobs . Hence, organisations conduct fraudulent activities in respect of assigning costs to job . Following are major ethical issues in job costing :

Stage of completion is being misstated.

Costs of jobs are being misrepresentated especially in cases where the entity follows the pricing policies as cost plus margin.

Costs are being charged to wrong job which leads to misinterpretating of data or financial statements as whole.