Question Details

What would you do as controller 



You are the Controller for WNC Home Media.  During the beginning of January 2011, when the company was adjusting and closing the accounting records for the calender year, you were home sick with the flu.  You therefore relied on your assistant to complete much of the work.  The company reported net income for 2011 of $125,000, down from $140,000 in 2010.  In February, after the financial statements have been issued and distributed to the company- investors and creditors, you discover that your assistant overlooked adjustments to insurance expense, depreciation expense and utilties expense resulting in an overstatement of net income by $12,500.  You immediately inform the company president of the overstatement and suggest correcting the errors and re-issuing the financial statements.The company president is concerned that investors were not happy about the lower profits reported in 2011.  He feels that 2012 is going to be a better year for the company.  Therefore he prefers to keep quiet about the financial statement errors in 2011 and adjust the accounting records for the errors in 2012.  
Required:
(a)	Who are the stakeholders in this situation?
(b)	What are the ethical issues in this situation?
(c)	What would you do as controller in this situation?




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