Daryl Kirby opened squid realty co on January 1, 2015. At the end of first year the business needed additional capital. On the behalf if squid realty co., Daryl applied to ocean national bank for a loan of 375,000.based on squid realty co.’s financial statements, which had been prepared on cash basis, the ocean national bank loan officer rejected the loan so risky.
After receiving rejection notice, Daryl instructed his accountant to prepare the financial statement on the basis on accrual basis. The statement included $65000 in accounts receivable and $25000 in account payable .Daryl then instructed his accountant to record an additional $30,000 of accounts receivable for commission on property for which a contract had been signed on December 28, 2015. The title to the property is to transfer on January 6, 2016, when attorney formally records the transfer of the property to the buyer.
Daryl then applied for a $375,000 loan from free spirit bank, using the revised financial statements. On this application, Daryl indicated that he had not previously been rejected for credit.
Discuss the ethical and professional conduct of Daryl Kirby in applying for the loan from free spirit bank
Your response must be in appropriate formatting and be at least 750 words with at least one outside reference in MS word
