Question

Ali Jamison is the controller at Williams Supply Company, a publicly traded distributor of automotive supplies. It is the end of the third quarter, and Ali is working under a deadline to get the quarterly financial statements prepared before the board of directors meeting at 2 p.m. The board of directors approves the quarterly financial statements before they are sent to the Securities and Exchange Commission. Unfortunately, Ali has a problem. The debit and credit columns of the general ledger trial balance do not balance. She is certain that this is a simple mistake that someone made when recording a journal entry, but she just doesn’t have time to look for the mistake. To meet the deadline, Ali decides to force the trial balance to balance by adding the $85,000 that she is out of balance to the Inventory account. Because inventory is the company’s largest asset, Ali justified her actions by thinking that this wouldn’t make a difference to anyone looking at the financial statements. She wished she had more time to look for the mistake, but the clock is ticking away. Is there any evidence of unethical behavior in this case?

Answer 1

Answer;

In the given situation discovered debit and credit of general record trail balance don't coordinate and there by she included $85000 in stock which is a dishonest or unethical conduct on part of Ali. As in the wake of including such sum(amount) stock will be exaggerated which may influence other related accounts in balance sheet. Ali ought to examine with the executives in regards to the issue or provide time to re correct the mistake, or it might either pass such an entry by opening suspense Account to correct the equivalent later.