equity. MINI-CASE 1 Financial and Nonfinancial Aspects of Changing to JIT TeleCh
ID: 2334968 • Letter: E
Question
equity. MINI-CASE 1 Financial and Nonfinancial Aspects of Changing to JIT TeleChief Inc. manufactures smart phones. It is considering the impl ntation of a JIT system. Costs to reconfigure the production line w amount to $200,000 annually. Estimated benefits from the change to are as follows . The quality advantages of JIT should reduce current rework cost $300,000 by 25%. Materials storage, handling, and insurance costs of $250,000 would reduced by an estimated 40%. Average inventory is expected to decline by 300,000 units, and the c rying cost per unit is $0.35 .Explanation / Answer
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I am answering the Mini case- Required Ethics.
IMA has developed 4 standards for ethical professional conduct:-
1. Honesty
2.Fairness
3..Objectivity
4.Responsibility
IMA Objectivity Standard clearly guide that the person should
- refrain from engaging any conduct which can harm the ethics.
- abstain from engaging in or suppporting any activity that might discredit the prefession.
In this Case, Paul Gate is the divisional controller and he is getting pressurised to record wrong number in financial statement which is against ethics. Here, Gate should follow IMA standards mentioned above and comply them.
2. Gate should follow these steps in case he is insisted:-
1) he should go to immediate superior and discuss the issue with them. Ensure Alien should not involved in this discussion.
2) the case is not resolved , need to submit the issue to Audit Commitee or Executive Commitee, Board of Directors or Chairman. Gate should communicate that recording wrong numbers could mislead the results and this is violation of standars.
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