• Sam is driven by his vulnerability to support his family, resulting in his desire to wish… 1 answer below »

1. Sam will convince Jim to step away from the bid. • Sam is driven by his vulnerability to support his family, resulting in his desire to wish better for the company in order to secure his job. • Clearly Sam is under duress and an ethical dilemma for which he can consult the independent board of directors and discuss if it is ethical for them to move ahead with the bidding. As of the present scenario, Magicant International does not have technical competence or manpower to produce the order at such a large scale. As an accountant it is Sam’s responsibility to consult external regulatory body(s); such as Chartered Certified Accountants(ACCA), CPA Australia or Chartered Accountants Australia and New Zealand; if the issue does not get resolved within in the company. Such an effort should put Jim under the obligation to step from the deal. Merit: The company will see a long term success period although the initial stages may be tough. The company can continue to work on lowering its variable cost per unit. 2. Sam should leave the firm. • As mentioned in the case study, Sam joined Magicant after a long stint at Major Motors Canada Inc. His integrity and objectivity are under duress with this situation according to APESB Code of Ethics for accountants as there is a strong infliction of self-interest and advocacy threat leaving his involvement in the whole deal most suspicious in terms of an audit. The company will go through tremendous amounts of stress pertaining to adjacent losses which will incorporate more bad faith from shareholders leaving both the company’s management and Sam under jeopardy. Merit: The action leaves Sam away from any kind of legal and ethical obligations if the deal goes through. at leaving his involvement in the whole deal most suspicious in terms of an audit. The company will go through tremendous amounts of stress pertaining to adjacent losses which will incorporate more bad faith from shareholders leaving both the company’s management and Sam under jeopardy. Merit: The action leaves Sam away from any kind of legal and ethical obligations if the deal goes through.

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