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Essay / Research Paper Abstract
This 3 page paper examines behaviors related to questionable accounting practices. How firms invite corruption is a part of the theme of this case study analysis. No bibliography.
Page Count:
3 pages (~225 words per page)
File: RT13_SA429eth.rtf
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Unformatted sample text from the term paper:
the general manager of the Fabricator Division, has improved profitably over the course of seven years and he is compensated based on profitability. Aggressive cost cutting is one measure
utilized in order to increase profits and this includes a large reduction in control procedures. However, a new competitor has gained market share with price reductions and Harris tries to
match that. However, Harris cannot cut costs any more while maintaining profitability. Harris then decides to manipulate inventory and that would alter the balance sheet. He wants to
temporarily change the numbers so his division looks profitable, and he continues to get raises and so forth. He plans to correct the balance sheet when the competitor goes out
of business. Preview has by and large relied on the integrity of its employees and does not have an internal auditing department so Harriss plan is likely to work.
In other words, because no one is looking over his shoulder, the manipulation of numbers would probably go unnoticed. The company in fact has allowed divisions free reign but expects
conservative accounting practices. Thus, if anyone knew what Harris was doing, there would be serious consequences. Harris obviously has a great deal of freedom in terms of which figures he
reports and this is attributable to Previews lax control environment. Of course, Harris does expect its employees to be honest and does not see a need to probe departments or
divisions. Preview feels that it is well run. However, Previews control environment has to some extent led to and facilitated Harriss desire and ability to manipulate the inventory. Harris likely
reasons to himself that the "mistake" is a clerical error. He can alter the books. Up until the point where Harris goes wrong, he has been a good and honest
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