Around the end of the year,an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of goods sold,and thus a higher net income.This action would be considered unethical because it is not a legitimate business transaction.

Question

Quizplus · Accepted Answer

This practice, known as income smoothing, is not inherently unethical if it complies with accounting principles and is disclosed appropriately in financial statements. It becomes unethical if it is intended to deceive stakeholders.

Around the End of the Year,an Accountant Orders a Shipment