Ethics—A Writing Experience 5-4[Note; An acceptable answer to the first one is provided as an...

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Ethics—A Writing Experience 5-4[Note; An acceptable answer to the first one is provided as an example below.]1. Management is eaking up a material item into immaterial portions for the purpose of smoothing income.  This action is unethical in that it will mislead financial statement users concerning the earnings of the firm. 2. 3.

Sandeep · Accepted Answer

1. In the given situation the move by the management, breaking up material item into immaterial portions for the purpose of smoothing income, is not ethical or one can say it is a misrepresentation of the fact by the management to the stakeholders and is unethical.
As per generally acceptable accounting principle (GAAP) the revenue or expenses shall be recorded to the period which it belongs to. 
2. Yes the accountant is correct in believing so, because of following two reasons;

Ethics—A Writing Experience 5-4 [Note; An acceptable answer to the first one is provided as an example below.] 1. Management is breaking up a material item into immaterial portions for the purpose of...

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