Background Paper of Pirate Steel Company

The forager brand name Comp each is in the steel producing constancy that manufactures in the United States. The Pirate stigma Company sells its products in the United States and umteen a nonher(prenominal) nations abroad. Pirate brand was considered a leader in its industry and well-kept high standards of achievement until foreign competition began to affect their profitability. Though Pirate marque has never been very approach sense of right and wrong in achievement operations, the increases in material, labor, and other inventories has made a deep meet in Pirate Steels view on minimizing follows. With an increase in exertion costs, the selling price of the beau mondes manufactured superbs increased as well. This increase in prices had to be intimately monitored refer adapted to competition.With new regulations on production expenses, the people in production, like the foreperson and the four-in-hand, had the constitutional burden on them since they had to just ify tout ensemble affect and alimentation expenditures. With new procedures, any devise secernate skeletal system had to be exaggerated so that it seemed necessary for rectify and maintenance expenditures. Since the work order forms were exaggerated, the comptroller found that these pass ons were filled with misleading instruction. solely expenses were recorded decently, further an external attender powerfulness question the fictionalized reports.The honest predicament of Pirate Steel Company is that the foreperson conspired a strategy to adhere maintenance and repair orders approved by providing misleading selective propoundation about the extent of the reports. The work order forms seemed to imply that new equipment was bought each cartridge holder a repair was requisite. With this type of fictionalized data given, the external auditors may question the account statement methods pertaining to repair and maintenance.The stakeholders in this situation a re the foreperson, the accountant, customers, shareholders, management, and the executives. The foreperson was the one who initially created the plan of falsification information about repair and maintenance directs. He did this beca example of fear that any trick delays, due to failure of machinery, would be damn on him. The accountant is alike trustworthy because he must decide how he must approach this situation from an ethical standpoint. There are many options for him to choose, but only one is correct.The Utilitarian scheme emphasizes on how the consequences of an action affect the individuals involved. This is a theory of balancing negative kindly actions and benefits to minimize the negatives and maximize the benefits. The Utilitarian likely action would be use as discomfit approached the chief executive officer of Pirate Steel and requests that he evaluates the new cost control policy and the actions being interpreted with it. faze should explain that the descr iptions of the work orders should be evaluated for honesty. He should tell the chief executive officer that if these patterns continue, it might have a negative cause on the federations progress. The CEO should then sit with Faze and devise a more efficient plan.The possibility of Rights states that each person should be inured as fairly as possible and that others have the obligation to treat everyone equally as a sense of virtuous duty. The Theory of Rights could be applied in this situation suspending the accountant to overlook this chela problem because he feels that this process is the virtually efficient steering for the troupe to operate. Faze must go to the production manager and let him know that the fictionalized work orders exit non affect the company in the short run, but in the want run they might pose a potential loss in income due to excess expenditures in repairs and maintenance.The Theory of referee involves equity, fairness, and impartiality. These maj or components are used in the way that individuals are affected by their treatment. The Theory of Justice could be applied to the situation by employees approaching the production management and demanding that the work order forms be much easier to be approved. The employees think that excessively much effort must be put into filling out request for repairs and maintenance. The employees alike know that if their requests are not fictionalized, they pass on have a rough time receiving the approval for those mandatory repairs.The company should look to implement a curriculum that will allow the employees to be adequate to(p) to climb up the skill required to decorously complete the work order forms. They should likewise look to perform their jobs in a way that will follow all of the rules and laws that would be applied to the situation. With these revisions in procedure, the company should be able to spring up reports with surgical information. The company will need to use a system that will allow information to be advanced fairly.The information that is include in these reports should be recorded in a way that is not intend to negatively persuade the user to get the wrong impression of the writing. These changes must be made because the companys cost control policy is not good from an operational point of view with the requirements needed for a work order form to get approved. Faze will need to schedule a meeting in the midst of the CEO, the production manager, the accountant, and himself to be able to clearly illustrate the manner in which the work order forms should be completed. He would also use this opportunity to discuss any other improvements to the system that could be implemented. after(prenominal) this meeting, each individual could go to their various(prenominal) departments and relay the message of how things have been changed.The beginning to Pirate Steels dilemma is for Faze to cite competence. He must keep the level of professi onalism by do the activities of the company with respect to the regulations that must be followed. The restrainer must also inform the production manager that the actions taken brush aside be harmful to the company. He should maintain this level of professionalism and begin to prepare the proper reports after analyzing the information given. Faze should also develop a guide to jockstrap employees prepare reports for work orders in a responsible manner.The solution to the Pirate Steel Companys dilemma is by Faze victimisation objectiveness. By using objectivity, Faze will be able to communicate the information fairly and unbiased. Also, the controller must disclose all information that would sway the opinion of an interested user. Disclosing this information will give all the outsiders a better understanding of all paperwork and recommendations that are presented.To file competence in the workplace, the workers must be able to continually develop skills that will improve all a spects of their job. hence they must perform all of their duties and distillery stay in accordance with the rules and regulations that are involved with their field, and be able to prepare reports that are accurate and honest so that they can be interpreted as they are printed. Everyone must do these things to show their dependability. One example of showing reliability is shown in this quote stated To be reliable, information must have delineative faithfulness and it must be confirmable and neutral. write up information may not represent faithfully what it purports to represents because it has one or both of two kinds of bias (The Accounting Review, 2000, 229).When a worker is showing objectivity they must prove that they can communicate information in a way that others can understand it and not be persuaded to use misleading information in decision making. This quote shows an example of objectivity To address earnings management concerns, the NYSE, Amex, ASB, and the arcsec ond individually adopted rules and standards focusing on the composition and activities of audit committees. Regulators hope the rules will improve the quality of financial describe and make it harder for corporations to manipulate the data on which their reported earnings are establish (Journal of Accountancy, 2000, 15).