Ethical Internal Control Structures in Accounting Information Systems

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What is one example of potential unethical behavior related to revenue recognition?

Computer fraud

Inflating hours worked for payroll purposes

Expense account fraud

Using a lower bad debt percentage than realistic (correct)

How can accounting information systems be misused in revenue recognition?

To browse confidential data

To commit hacking activities

To assist in committing expense account fraud

To inflate revenue figures (correct)

Which of the following is an unethical behavior specifically mentioned in relation to revenue recognition?

Fraudulent financial reporting

Inflating hours worked for payroll purposes

Revenue inflation (correct)

Hacking activities

What can accountants do to address potential unethical behaviors in revenue recognition?

Become aware of potential unethical behaviors (B) Signup and view all the answers

Which action related to revenue recognition is both unethical and illegal?

Fraudulent financial reporting (B) Signup and view all the answers

How can an accounting information system facilitate unethical behavior in revenue recognition?

By inflating revenue figures for fraudulent financial reporting (A) Signup and view all the answers

What was the unethical behavior described in the anonymous company that sold computer software?

Forcing products to be shipped earlier than anticipated (D) Signup and view all the answers

Why did salespersons in the anonymous company have to call customers and ask them to take receipt of their orders earlier?

To meet monthly sales goals (C) Signup and view all the answers

What was the consequence of shipping products to customers who had not ordered in the anonymous company?

Artificially inflating revenue (C) Signup and view all the answers

What assumption did the individuals engaging in unethical behavior make about the accounting information system (AIS)?

It records sales upon customer orders (A) Signup and view all the answers

Why did top management set very ambitious monthly targets in the anonymous company selling computer software?

To meet annual revenue goals (C) Signup and view all the answers

What was the primary goal of the unethical actions described in the anonymous company?

To meet monthly sales targets (C) Signup and view all the answers

What is the reason accountants must understand what actions are ethical and unethical?

To resist temptation to commit unethical acts (C) Signup and view all the answers

Why is it mentioned that accountants are pressured to assist in, or cover up, unethical actions?

To highlight the risks they face in unethical situations (C) Signup and view all the answers

What is the potential consequence of accountants succumbing to unethical behavior?

Loss of professional integrity (D) Signup and view all the answers

Why should accountants be cautious when dealing with assets that can easily tempt them?

To avoid being coerced into unethical behavior (C) Signup and view all the answers

How can a better understanding of ethical boundaries help accountants facing temptation?

Help them resist temptation to engage in unethical behavior (A) Signup and view all the answers

In the context of the text, why is it important for accountants to resist the temptation to commit unethical acts?

To avoid being pressured to cover up unethical actions (A) Signup and view all the answers