Ethics Case Assignment Essay

Wayne Terrago, controller for Robbin Industries, was reviewing mathematical product bell publishs for the year. One amount in these reports continued to bother him publicize. During the year, the company had instituted an dearly-won advertising campaign to sell nearly of its slower-moving products. It was still too early to posit whether the advertising campaign was successful. There had been more internal debate as how to report advertising cost. The unrighteousness president of pay argued that advertising cost should be describe as a cost of production, skilful like direct materials and direct labor. He therefore recommended that this cost be determine as manufacturing overhead and describe as part of inventory costs until sold. Others disagreed. Terrago believed that this cost should be reported as an outgo of the current period, based on the conservativism principle. Others argued that it should be reported as postpaid Advertising and reported as a current asset.T he president finally had to locate the issue. He argued that these costs should be reported as inventory. His arguments were practical ones. He observe that the company was experiencing financial difficulty and expensing this amount in the current period major power jeopardize a planned follow offering. Also, by reporting the advertising costs as inventory rather than as prepaid advertising, less attention would be directed to it by the financial federation. instructions (a) Who are the stakeholders in this built in bed The stakeholders in this situation are Wayne Terrago controller for Robbin Industries, Robbin Industries vice president of finance, Robbin Industries employees (others I am presumptuous are employees from Robbin Industries financial department), and the financial community (external users).Correct INCLUDEPICTURE http//edugen.wiley.com/edugen/courses/crs4477/common/art/pixel.gif MERGEFORMATINET (b) What are the ethical issues involved in this situation The eth ical issue involved in this situation is how to report advertising cost. The event shows many discrepancies about the way the advertising expenses should be recorded.