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Sam cresco, president of cresco company, has instructed sharon gross, the head of the accounting department for cresco company, to report the company’s land in the company’s accounting reports at its fair value of $170,000 instead of its cost of $100,000. cresco says, “showing the land at $170,000 will make our company look like a better investment when we try to attract new investors next month.” explain the ethical situation involved for sharon gross, identifying the stakeholders and the alternatives.

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If Sharon would agree to the idea of the president, she would be violating the Generally Accepted Accounting Principles (GAAP). According to GAAP, land cannot be classified in the financial statements on its fair value. Cost principle should be followed when reporting land on the financial statements. This would be a collusion (fraud) among them if she agrees to the idea of the president of the company. 

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