You are a newly appointed financial controller of Gouta Pty (ltd). The following matters have
come to your attention:
1. Your assistant is heavily in debt to a junior member of the finance staff, who has a considerable
amount of personal wealth in spite of his fairly junior position in the company.
2. The CEO of the company was in the habit of adjusting the financial statements prepared by the
finance director to makes performance appear better than what it actually was.
3. A member of your department, another management accountant, recently made significant
errors in completing the sales tax returns to the tax authorities, which resulted in a fine and
interest charges for an underpayment of the sales tax liability.
Required:
In each of the three cases
a. Identify and describe the ethical threats. (9 marks)
b. Describe the actions that can be taken to either remedy the situation or to safeguard against
possible future problems. (9 marks)
c. Explain the constraints that may hinder the remedies from your answer in (b) above.
(7 marks