Accounting managerialAssume that your company's sales staff provides information on expected sales...

Question

Accounting managerialAssume that your company's sales staff provides information on expected sales and selling prices for items making up the sales budget. You have concerns regarding the sales staff's input in the sales budget when its compensation is at least partly tied to these budgets. You feel it is important to assess any potential bias in information provided in the budget process.Required:Who are the stakeholders in this situation?What are the potential ethical issues and concerns?What suggestions can you make to reduce these concerns?Your responses must be 3-4 sentences long each and represent "active communication."

David · Accepted Answer

Answer 
Solution 1:- 
Variances are not explanations” 
Through this point authors wants to explain that variances depict only the performances 
and deviations from the standards already framed. They are not self explanatory unless 
reasons for the deviations are found by the management, thus, it is the duty of the 
management to enquire about the reasons causing such variances. Only after adequate 
reasons for the variances in the industry are found, it explains the real performance of 
the company. 
Quote 2: “Management’s goal is not to minimize variances.” 
Through this quote emphasis is laid on the objective of management .According to this 
quote management aim is to maximize the wealth of shareholders and thus major aim 
of management is not to minimize variances. If the influence of variances is not much so 
as to influence the profit or wealth of shareholders management may overlook it. 
Management also has responsibility towards society as a whole, therefore ultimate aim 
or objective is to find out the failure and provide benefits to the society.
Solution 2:- 
Accounting managerial 
Assume that your company's sales staffs provides information on expected sales and 
selling prices for items making up the sales budget. You have concerns regarding the 
sales staff's input in the sales budget when its compensation is at least partly tied to 
these budgets. You feel it is important to assess any potential bias in information 
provided in the budget process.  
  
    Who are the stakeholders in this situation?- 
Stakeholders involved in this situation are: - Company’s shareholders, management, 
and sales staff. This is because everybody’s stake is involved directly or indirectly in 
one or the other way. Shareholders have invested amount in the share capital of the 
company therefore their stake is involved in this way.

Accounting managerial Assume that your company's sales staff provides information on expected sales and selling prices for items making up the sales budget. You have concerns regarding the sales...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment