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An Essay on Professional Ethics
Case study for professional ethics
Short note on professional ethics
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The ethical dilemma in this case is one that Daniel Potter is faced with. Daniel is a staff
accountant at a Big Eight accounting firm, Baker Greenleaf. He was given the duty of
performing an audit on a wholly-owned real estate subsidiary (Sub) of a long-standing and
important client of his firm. Oliver Freeman is Daniel’s project manager. Oliver is the one that
gave Daniel the task of performing the audit, and he is expecting a clean opinion from Daniel on
the analysis of the Sub in order to secure the clients account exclusively. While performing the
audit, Daniel found a discrepancy with the value of the Sub’s largest real estate properties. The
Sub had valued the property at $2 million on their balance sheet, and Daniel had estimated the
value of that property to be much lower. Since the property was a dilapidated building in a bad
location and had been vacant for a number of years, Daniel estimated the value to be $1.9 million
less than what the Sub had valued it at. Daniel spoke with the managers of the Sub about writing
down the value of the property by what he had estimated, and they refused. Daniel decided to
submit his analysis with a “subject-to-opinion” designation since he and the client had a
difference of opinion. Oliver wanted to see a “clean opinion” in the case of the audit, but Daniel
refused to change it because that violated accounting regulations. Since Daniel would not
change his analysis, Oliver took it upon himself to pull the analysis and change it to a clean
opinion. Oliver also issued a negative evaluation on Daniel’s performance of the audit. Daniel
must decide what to do about the situation because his name is on the files that Oliver changed,
and to see...
... middle of paper ...
...sheet.
Daniel Potter was faced with a decision about reporting his project manager for falsifying
information on an audit for a client. His project manager, Oliver Freeman, changed the analysis
that Daniel submitted in order to get a clear opinion so that their firm may get an exclusive
account. My decision was to report the incident so that the correct information would be
supplied on the audit documents. The decision I chose may cost Baker Greenleaf to lose an
important client and Oliver Freeman to lose his job, but it will uphold the integrity of the
accounting profession and keep Daniel Potter safe from the liability of providing false
information.
References
Chapter 5, Approaches to ethical decision making. (pp. 326-382). Business &
Professional Ethics for Directors, Executives, & Accountants, 4e. Thomson
South-Western 2007.
Cruickshank, Garth & Romano is a new real estate appraisal and consulting firm. Richard Romano, a principle of the firm, had just completed a preliminary evaluation of a property for a new client, Watson & Musico. However, his client refuses to accept the appraisal and requested the value be increased by $4.5 million or else they would take their business elsewhere. Richard's decision on his client's estimate could have great impact on Cruickshank, Garth & Romano's success and its ability to develop new clients. The new firm could ill-afford to pass up on doing Watson & Musico's business but Richard also wanted to complete the appraisal according to his best estimate of the current market value of the property. This paper will analyze the ethical issues and alternatives for this case.
Problem: David H. Lucas purchased two beach front lots on Isle of Palms in Charleston
In The Accountant's Story, Pablo's brother and accountant, Roberto Escobar, discusses the means by which Pablo rose from middle class simplicity and obscurity to become one of the world's wealthiest men. At the height of its power, the Medellín drug cartel was smuggling fifteen tons of cocaine per day, worth more than half a billion dollars, into the United States. According to Roberto, he and his brother's operation spent $1000 per week purchasing rubber bands to wrap the stacks of cash, storing most of it in their warehouses; 10% had to be written off per year because of "spoilage" by rats that crept in at night and nibbled on the hundred dollar bills.[8]
Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).
understood why. They did not sit down and think about some reasons why this could have
Oliver, he realized that he was nothing more than a shipping clerk. He understood that being a
The house was built in 1928 and was occupied by the same family until the mid-1990s. The last of four elderly sisters who lived there died in 1995 at the age of 102, and the house was sold five years ago
Nevertheless, Steven’s integrity and credibility will always be in question until the case is resolved. He also has to endure possible differences in his working relationships with other colleagues.
To that end, Oliver operates as a catalyst rather than as a hero. His lack of hero status allows us to follow him into the underworld without ever being a participant in it, just as he never desired to be a participant in it.
Accounting is perceived to be so boring because it is analogous to counting. Most older people
A new employee, Rosie Alexander, was given a task from her supervisor, Conor Hall. The task was answering a few questions about a recent acquisition of new stock for a long-term client. Rosie, unable to answer all of the questions and provide a comprehensive response, sent her draft back to Conor requesting additional information. She expressly stated in her response that the information that she provided should not be sent to the client due to the informal nature of the response. A few days later when the client followed up with her request Conor, who had not yet done anything with Rosie’s response, forwarded the incomplete response to the client. When client then complained that the response lacked detail, instead of taking any form accountability or responsibility, Conor placed the blame on Rosie. In doing so he put her in a difficult position and made her look unreliable. The next day Rosie decided to approach her supervisor and tell him that he should tell the client the truth to which Conor agreed.
My paper will show the ethical value in making a decision, right or wrong, that the ultimate result is, I’ll say money. This paper illustrates my opinion in why Harry Stonecipher should have been forced to resign, to save the company name so to say. I’ll talk about the utilitarian and deontological considerations for both parties involved and explain why this decision must have been hard to make.
Accounting dates back as far as first centuries, is the language of business. As everything has gone through many changes, accounting has also changed many times through out the centuries. It went from the use of abacus to the most advanced softwares, and computers. With these drastic improvements nowadays accounting, financial accounting and management are facing big challenges. From the presentation of the reports to communication to the users, investors, and owners, the accounting field has gained totally a new shape from two decades ago. Today with the dynamic change in every aspect of life, the accounting field has to act fast and be able to adapt these new changes and challenges in order to survive.
When and if a person is unable to come to a resolution, after reviewing principles and alternatives that are acceptable to the person, it may be necessary to move to the post ethical level. Seldom are administrators reach this fundamental philosophical level of reflection however if pushed to this level it is because of a cynical adversary or under the sway of a deeply disillusioning experience or dealing with a profound personal
...n the beginning because he compliments Oliver on being sharp, after he takes Oliver back, he still acts as if Oliver didn’t know anything about their business after he tortured him, and in the end, when he’s in jail, he tells Oliver his little secret because he is still fond of Oliver, “The papers… are in a canvas bag, in a hole a little way up the chimney in the top front room.” (p. 414, para. 9).