The professional code of ethics requires an officer to carry out their roles within the required rules and regulations and in a just manner. Integrity and professionalism is the basis to the professional code of ethics. The accountant’s actions are completely both unethical and unprofessional. The act of an officer committing an irregularity knowingly and voluntarily may result in legal battles between institutions concerned and might even lead to the closure of the business (Association of Accounting Technicians, 2013).
Businesses that are performing badly are only willing to provide financial statements that will not discredit them form the lending institutions. A perfect example is the balance sheet. A balance sheet states the financial position of a business at a certain date omitting any other details regarding whether the business is continuously making losses. A business that is performing very well is willing to present additional testimonials so as to ensure that it qualifies for the credit requested. These statements are such as the profit and loss account and the cash flow statement. These two documents show the performance of the business within a period of time. They show whether the business is making losses or profits. These are the types of information that a business may be unwilling to provide the bank with in order to safeguard their interests (Norton, Diamond, & Pagach, 2006).
Banks and business owners share numerous features
such as reduced risk; banks require a financially stable business to lend to
whereas a business seeks to reduce risky operations for instance by acquiring
insurance covers. Additionally, both entities highly value return on investment
and reliable revenue sources. A loan officer should not accept insufficient
information regarding a business borrowing funds or seeking any other financial
assistance. Therefore, I would decline any attempts to by the accountant in
offering insufficient information (Fraser & Ormiston, 2001).
Association of Accounting Technicians. (2013). Professional ethics. London: BPP Learning Media Ltd.
Fraser, L., & Ormiston, A. (2001). Understanding Financial Statements. Upper Saddle River, N.J.: Prentice Hall.
Norton, C. L.,
Diamond, M. A., & Pagach, D. P. (2006). Intermediate
accounting: Finacial reporting and analysis. Boston: Houghton Mufflin.
Firstly I would seek working capital financing or rather the money utilized to pay business expenditures to be incurred all through the time period till cash from sales begins to be collected, this is temporary in nature, such that the business will be financed through a temporary financing instrument. Secondly, I would seek equity-financing, finances to be utilized to in funding speedy growth, business development, acquisitions as well as the acquirement of long-standing assets. These are defined as assets that are referred to as assets, which are repaid over a period of greater than a 12-month business sequence (Pearce & Barnes, 2006).
I would be willing to give a venture capital firm a percentage ownership of between 30-35 percent, this is because I endeavor to remain the senior decision maker. Owing to the fact that I came up with a workable business idea awarding the venture capital firm equal proportions for the business would be unattractive for me since I possess a vision of how the business should be in future (Kleinschmidt, 2007).
Every lending institution endeavors to lend to companies possessing a good financial performance. Venture capitalists are particularly interested in performing companies since their equity share will continue to rise as the company grows. Thus as a venture capitalists I would highly invest in progressing firms to that guarantee the return on my investment along with the increasing stock value and price performance. Venture capital companies take in their returns once an investee firm builds a flourishing record of accomplishment to be eligible for listing at the stock exchange. The dividends share of the company is directly proportional to the financial performance of the company thus a developing company will award a greater share price (Gladstone & Gladstone, 2002).
Gladstone, D., & Gladstone, L. (2002). Venture capital handbook: An entrepreneur’s guide to raising venture capital. Upper Saddle River, NJ: Prentice Hall.
Kleinschmidt, M. (2007). Venture capital, corporate governance and firm value. Wiesebaden: Deutscher Universitäts-Verlag.
Pearce, R., & Barnes, S. (2006). Raising venture capital. Chichester, West Sussex: J. Wiley & Sons.
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