Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver

Exercise 11

Better Days Ahead, a charitable organization, has a standing agreement with First National Bank. The agreement allows Better Days Ahead to overdraw its cash balance at the bank when donations are running low. In the past. Better Days Ahead managed funds wisely, and rarely used this privilege. Jacob Henson has recently become the president of Better Days. To expand operations, Henson acquired office equipment and spent large amounts on fundraising. During Henson's presidency, Better Days Ahead has maintained a negative bank balance of approximately $10,000.
Requirement
1. What is the ethical issue in this situation, if any State why you approve or disapprove of Henson's management of Better Days Ahead's funds.