Mr. Mensah the Financial Accountant of MPhil Acct Ltd was reviewing the draft financial statements...
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Accounting
Mr. Mensah the Financial Accountant of MPhil Acct Ltd was reviewing the draft financial statements prepared by an Accounts Officer and came across the following issues: i) In calculating the interest on staff loan, the Accounts Officer in error applied 5% instead of 10% interest rate. Mr. Mensah is a beneficiary of the staff loan and a member of the staff loan committee. ii) The staff union has demanded a separate account for the staff loan. This they advise would promote transparency and accountability in the process and approval of loans. iii) Included in accounts receivables was a company known as Noble Ltd, owned by his mother- in law. Instead of an outstanding amount of GHS 60,000, the account balance as per the draft financial statements was GHS 80,000 The CEO, John who is known to be domineering has an outstanding balance of GHS100,000. This was as a result of cumulative unaccountable imprest which is against the accounting policy of MPhil Acct Ltd. Required: Identify, evaluate and address the above threats to compliance with the fundamental principles of good ethical behavior, Mr, Mensah is confronted with.
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