The Dilemma Of An Accountant Analysis Essay Example
The Dilemma Of An Accountant Analysis Essay Example

The Dilemma Of An Accountant Analysis Essay Example

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  • Pages: 4 (1011 words)
  • Published: April 2, 2017
  • Type: Analysis
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The Dilemma of an Accountant Studying the ethic case the dilemma is whether Dan Potter, who was assigned to an audit assignment should go by the audit and guidelines or whether he should disregard the ethical standards and continue to follow the instructions of his immediate boss. Dan Potter is working as a staff accountant at Baker Greenleaf. Dan final had an opportunity on first major audit assignment. This assignment required him to work under the supervision of his senior, Oliver Freeman, on an audit for a client's subsidiary.

The Big Eight Firms shares the work.At the start of the work, Gene, his assistant, told Dan that Oliver was a strict authoritarian and a very inflexible man. During the course of the audit, Dan came across a material misstatement that legally required him to issue an "except for" opinion but his s


upervisor insisted on issuing a clean audit opinion, upon which Dan had several heated arguments with his supervisor. These events led Dan to question whether he should do as instructed by his supervisor or follow the codes on ethics and professional integrity.

The four main stakeholders involved in the case are.The first stakeholder is Dan, who wants to pursue a career free from professional misconducts. His goal is to carry out work honestly and according to the highest quality standards. He seems to have no compromise policy when it concerns applying business ethics and by doing so his main interest is maintaining the excellent reputation of his employer and securing an early promotion for himself. The second stakeholder is Oliver Freeman, who wants to maintain his supremacy over his subordinates, keeping good relations wit

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the client and showing his loyalty to Baker Greenleaf by securing the client wholly for the firm.

The third stakeholder is the client's management, who has a material misstatement in its accounts but is nevertheless interesting in obtaining a clean audit report for its subsidiary. The final stakeholder is Baker Greenleaf itself, an accountancy and audit firm interested in broadening its customer base, increasing revenue, and maintaining its record for excellence. As the most important one, Dan should take a very cautious and calculated action. It may be appropriate for him to discuss the matter, discretely with other staff members to establish whether or not it is of concern to them.

It would be preferable to discuss the matter with persons known to be reliable. If Dan shares the concerns and receives no solution, it may be appropriate for him to take it to the personnel department. He should discuss the matter with the responsible person and make brief notes of the discussion. This step should address his concerns and clarify his position to the senior management of the firm. If the process is not successful, Dan should take the matter to his partner counselor, who is a more senior member of the management.

Dan may wish to avoid it in the first place, but it may be necessary to protect him. If his concerns are still not addressed at the firm level, then Dan has the last choice of reporting the incident to the professional conduct and ethics committee of the American Institute Certified Public Accountants. Dan has some good reasoning behind why he should continue to follow the ethics and professional regulations and stand by his

decision to issue an "except for" opinion.By following the instructions of his supervisor, not only would he be violating the codes of professional conduct but also would be sacrificing his professional integrity to secure a client for Baker Greenleaf, a client who may prove to be dangerous for the firm for the long run. On the other hand, if Dan decides to do nothing and silently follow his supervisor instructions, there lies a possibility that Dan may be accused of not bringing attention to the matter or even actively working on the "cover up.

Professional ethics do not permit certified public accountants to take no action with serious matters and to do nothing may involve Dan in disciplinary proceedings by the American Institute of Certified Public Accountants. If the misstatement is found later, this may trigger legal litigation from the parties then involved and may bring in a monitory loss as well as a loss to the reputation that Baker Greenleaf has maintained for so long. The philosophical approach used to decide in this case is the deontological approach to ethical decision-making.This is a theory from the absolutist school of thought and its approach suggests that: •this is a non-consequentialism theory •the principal is most important and not the outcome •an action can be deeming right or wrong when the morals for the action are known. The principle of integrity and professionalism is most important over everything.

No matter how influential or high paying a client may be, it is wrong and against the morals to facilitate a client and issue a dishonest opinion. Even for the sake of securing a client and the fee

that it pays.Analyzed closely, it not only means slow death for the death but also for the firm. If the firm keeps on deceiving the client's shareholders and investors everything is fine, but it is not. The client's resources may extinguish one-day. The business may become bankrupt.

So not only would Baker Greenleaf eventually lose the client but also its reputation and the trust public had vested in it as an independent auditor. Dan, individually, is also responsible to issue "an independent opinion" and not "a clean opinion. He should issue the independent opinion, whatever it may be, and prove that he is acting honestly and involved in no wrong. As long as he is doing the right thing and following the principle, it does not matter what the outcome is. Whether his superior does not know or the firm is losing a client is irrelevant, what is relevant is that the professions integrity and professionalism remains intact.

Otherwise everyone in the auditing profession would start to commit frauds or engage in cover ups.

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