Ben Doyle is a trainee Accountant and is responsible for preparing the first draft of the financial statements of the company he works for in Dublin: Applied Accounting Assignment, CIT, Ireland

Ben Doyle is a trainee Accountant and is responsible for preparing the first draft of the financial statements of the company he works for in Dublin. He has received the following email from the Finance Director of the business he is working in (his direct boss), the email states:

‘We are under pressure this year, post covid, in terms of results and it’s very important that the upcoming set of financial results shows a favorable financial performance and position. If the results are good then potentially there are big bonuses available for all staff, including you! I know that many of the numbers in financial reports are based on estimates. When you are preparing the financial statements, I want you to choose estimates that will produce the maximum acceptable reported profit. This means airing on the side of caution and presuming that the costs will be at a minimum and sales at a maximum. I hope you will comply with my request. I will be carrying out your annual staff appraisal shortly and this will certainly be a factor in the grading I give you.

Ben is concerned about this request and has approached a friend from college, Louise, who is also a trainee accountant, for advice. Louise works for another company.

Part a) Identify the ethical issues/ threats that Ben might face in this situation refer to the ethical principles in your answer.

Part b) How might Ben decide whether he is comfortable or not with this situation?

Part c) Discuss why ethics in accounting is so important to the users of financial statements.