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Why ethics is so crucial for the accounting profession
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Why ethics is so crucial for the accounting profession
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In “The Unscrupulous Partner” ethics case, Andrea Fuller is a tax partner at a local certified public accounting firm located in southern California. Ed McDouglass is a general partner of Skyline Views, which is a limited liability partnership that constructed, operated and sold condominiums. For devoting 100% of his time into the limited liability partnership and taking charge of any situation, Ed functions as the general manager for Skyline Views; therefore, he is allowed a management fee to include two percent of expenses and ten percent share of the year 's net income if it exceeds $100,000. As a result, Ed hired Andrea to complete the tax return for Skyline Views. While Andrea was collecting data for Skyline Views’s tax return, she discovered a In addition, by deciding not to inform the limited partners of Ed’s deceit, Andrea would be disregarding the American Institute of Certified Public Accountants Code of Professional Conduct in her being unreliable, dishonest and deceitful. Andrea has the responsibility of protecting her client, which involves encouraging the correction of financial statements in order to prevent suspicion during audits that could lead to fines and imprisonment. Andrea’s second option is to inform the limited partners about how misrepresentations of Skyline Views’s financial statements are permitting Ed to claim a higher management fee; this decision will fulfill her due diligence obligation to the limited partners while maintaining her integrity as a certified public accountant in supporting the American Institute of Certified Public Accountants Code of Professional Conduct. After informing the limited partners, it would not be her responsibility as the limited partners would choose a necessary course of action against
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.
The principles of the AICPA Code of Conduct should guide the work that Jose and Emily do as auditors. The principles that specifically apply to this situation are Responsibilities, The Public Interest, and Due Care. CPAs have the responsibility to “exercise sensitive professional and moral judgments in all activities.” (Mintz, p. 19)
The vignette described a woman who comes in for a session in an agitated state. The psychologist has worked with her for a few weeks and she was not overtly suicidal or homicidal. On this visit, the psychologist decided to refer her to an inpatient due to her becoming unreliable and taking 17mg of Xanax in 30 hours instead of 2.5mg prior to her appointment.The decision making process for this vignette is very important because of the dilemma involved. The ethical decisions-making process I am going to engage in will be the Canadian Code of Ethics for Psychologist and the decision- making process that accompanies it.
David Volin violated the general law C. 112, S. 87D(h), which permits an unlicensed accountant to use, in the advertising and business correspondence, the terms “an accountant”...
It is true that this patient lost her life due to religious reasons. Doing what is ethically right is the right thing to do in this type a challenge. I know it is frustrating for the healthcare team present at that time for not saving the life of this individual. But patient has the right to for his medical condition. (Right to refuse or accept care).
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).
Turner, Robert M. "Ethics and Professionalism: The CPA in Industry." The CPA Journal (1999). Retrieved on 18 September 2006 .
Kozier and Erb's (2015) refer to veracity as telling the truth. Sometimes the nurse is left in a dilemma whether to tell the patient the truth. The nurse is left with the question whether, to tell the truth which may cause anxiety or a lie that is likely to relieve anxiety and fear? In reality lying to the sick persons would rarely justify. It is important that the nurse to weigh any benefit derived from telling lies to the patient versus the loss of trust the patient can have the nurse and the anxiety caused by not knowing the truth
Are businesses that behave unethically destined for failure? Currently, businesses are facing growing societal pressure to perform responsibly and sustainably. Western cultures have become more aware of the effect their consumption has on the environment. Furthermore, companies are being put under pressure to treat labour, and where applicable, animals with greater care. However, this is to an extent optional and it is often argued that corporate social responsibility is taken up voluntarily by the business and that following laws regarding ethical trading is just a prerequisite to “fulfilling the responsibility of enterprises” (Enderle, 2014, pp 723 - 735).
With every business activity come opportunities for fraudulent behavior which leads to a greater demand for auditors with unscathed ethics. Nowadays, auditors are faced with a multitude of ethical issues, and it is even more problematic when the auditors fail to adhere to the standards of professional conducts as prescribed by the American Institute of Certified Public Accountants (AICPA). The objective of this paper is to analyze the auditors’ compliance with the code of professional conduct in the way it relates to the effectiveness of their audits.
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. The. My decision was to report the incident so that the correct information would be supplied in 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.
Many ethical dilemmas are philosophical in nature, an ethical issue can be described as a problem with no clear resolution. In order to solve the issue or dilemma a consensus between the parties involved must be reached. There are several reasons to come to an agreement over an ethical dilemma, it is the basis for all aspects of personal and professional dealings. Each one of us is part of a civilized society and as such it is our responsibility to be rational, honest and loyal in our dealings with others. (Alakavuklar, 2012) states that individuals make decisions for different situations in business life involving various ethical dilemmas. Each time either consciously or unconsciously individuals may follow some ethical approaches
Much of our lives we are faced with situations where we come across the opportunity to make ethical and unethical decisions or opinions. We come across difficult people who live their lives unethically. Do we allow them to influence us? Do we become transparent and lose ourselves when it seems as though everyone is doing something that is morally wrong? I for one, do not give in to this peer pressure.
The Facts: Kermit Vandivier works for B.F. Goodrich. His job assignment was to write the qualifying report on the four disk brakes for LTV Aerospace Corporation. LTV purchased aircraft brakes from B.F. Goodrich for the Air Force. Goodrich desperately wanted the contract because it guaranteed a commitment from the Air Force on future brake purchases for the A7D from them, even if they lost money on the initial contract.
The mental status of Jonathan has made him competent and capable of making rational decision to any medical intervention or treatment. This gives rise to an ethical dilemma that the hospital staff and Jonathan’s physician may be facing. Jonathan’s autonomy conflicts with his healthcare team’s commitment to do good to him or in providing care in his best interest. The healthcare team or medical staff may encounter more difficulty because the father of Jonathan appears to be supportive with his decision on the refusal of care and treatment (except for pain management).