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Ethics Challenge and Communicating in Practice - Essay Example
Finance & Accounting
Pages 4 (1004 words)
s Course 657 26 November 2011 Course Project 1: Ethics Challenge and Communicating in Practice Budgets put into perspective the future financial goals of a firm. Divergent views on budget-making process obfuscate budget-making process through ethical and communication in practice issues…
Ethics Challenge 1. a) Why Atkins and Granger behave in this manner, and the expected benefits of budgetary slack A budgetary slack is a premeditated allowance for excess spending as overstated expenses or understated income (Stevens 1). Atkins and Granger make liberal use of this budget-making technique when making sales and expense projections. Budgetary slacks alleviate the effects of deviations if they occur. A more shifty use of the technique is to make it easier for managers to achieve targets, especially where sales performance results in bonuses and appraisals (Stevens 1). b) How budgetary slack can adversely affect Atkins and Granger Budgetary slacks in sales and expenditure projections can adversely affect the staff the projections relate. In the case of Atkins and Granger, altered projections can result in less motivation to achieve more in their areas of responsibility as they can alter the figures to give the impression that they are performing beyond the projections. On another note, if the two staff can alter the financial figures at will, then there is serious risk of the pair falsifying account figures to serve selfish interests (Stevens 1). 2. ...
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