The Dilemma Of An Accountant

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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...

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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



Chapter 5, Approaches to ethical decision making. (pp. 326-382). Business &

Professional Ethics for Directors, Executives, & Accountants, 4e. Thomson

South-Western 2007.

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