Module One Assignment Ethical Scenarios
Ethical Reasoning 1 Maria is a partner in a medium-sized CPA practice. She and her firm are bidding on a consulting engagement with Western Construction Company. Before Maria and her firm can make the proposal to Western Construction, Maria’s husband, Robert, comes home to share some good news. Robert has just been offered his dream job as CFO of Western Construction. Maria is happy for her husband, but now she must consider the ethics of bidding on the consulting engagement. Upon searching the AICPA Code of Professional Conduct, Maria does not find a specific rule or ethics interpretation that addresses this circumstance, so she applies the conceptual framework. Q: What should Maria do and what is the likely outcome?
Ethical Reasoning 2 Janice is an audit manager in a large public accounting firm with 35 offices on the East Coast. Janice has been dating Keith, a CFO of a company that is not a client of Janice’s firm. Keith has a significant investment portfolio of his own. After dating for four months, Janice and Keith decide to get married. However, Janice tells Keith it is important for him to carefully review his investment portfolio. The policy in Janice’s firm is that she cannot have a direct investment, of any size, in any audit client of the firm. Further, she cannot have a material indirect investment in the audit client. Q: How should this be handled by Janice and Keith?
Ethical Reasoning 3 Dana Moore is a CPA in Georgia. Dana has a modestly sized tax practice, and she performs several audits of local school districts as well as a few cities and counties. Dana is also on the board of directors of several charities, where she interacts with some of the businesspeople in the area. One day, a local technology entrepreneur in the area walks into her office and says, “I have worked with you on the board of directors of a local charity, and I like the perspectives you bring to the board. My company is growing and needs an audit. I know you do audits, and I am wondering if you would give me a bid on doing my company’s audit.” Q: If you were Dana, what would be your response and why?
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