American Accounting Association (Aaa) Model

Task
Lords & Ladies Boutique wishes to expand and has borrowed $250,000. As a conformation for making this loan, the bank requires that the store maintain a circulating(prenominal) symmetry of at least 1.50.? 
Business has been good precisely not great. Expansion costs have brought the genuine proportion down to 1.40 at 15 June. razz Hwan, owner of the boutique, is considering what tycoon happen if the business reports a current ratio of 1.40 to the bank. iodin argumentation of pretendion for Hwan is to record in June some tax revenue that the business will earn in July of next year. The get down for this job has been signed.
Required?Using an honourable decision model, envision a course of action that is appropriate for Hwan.

Various ethical decision models have been developed by and for the accounting profession. These support a foundation or framework for ethical decision-making. arguably the most widely used is the American Accounting knowledge (AAA) model.

The AAA model suggests a logical seven-step process for decision-making, which takes all(prenominal) ethical issues into account.

To achieve the most ethically correct course of action appropriate for Josh Hwan in the above job I have used the AAA model.

Step 1: What are the facts?




The facts are that Josh Hwan, the owner of Lords and Ladies Boutique, is aware of the conditions on which he agreed when entering the loan contract. The condition was that he must maintain a current ratio of at least 1.50, however due to the expansion costs his current ratio is at 1.40.

Step 2: What are the ethical issues of the case?
The ethical issue is whether or not Josh Hwan should report the true value for the current ratio, or if he should include some revenue that will be gain in July of next year. If he includes this revenue the current ratio will raise to, or above, the agreed upon value of 1.50. This act however, would be illegal and would also be negligent of his passkey duties.

Step 3: What are the norms, principles and values related to the...If you postulate to get a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .