Ethics Case 3-3: United Thermostatic Controls Case

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Legality and Ethicality of Corporate Governance
ETH 376
Ethics Case 3-3: United Thermostatic Controls Case

The purpose of this paper is to evaluate the legality and ethicality of the corporate governance activities that occurred in an ethics case presented in the text. The paper will provide relevant details regarding the legality of the activities, the criteria by which Sarbanes-Oxley would apply to this case, the ethicality of the activities, whether or not the activities were equitable to internal and external stakeholders, and the next steps representing best interest of all stakeholders. Corporate governance is a commonly used phrase to describe a company’s control mechanisms to ensure management is operating according to policies and regulations. Examples of such mechanisms are a company’s internal controls systems, internal audits, external audits, and an audit committee. Corporate governance aims to prevent accounting abuse and fraud. A strong corporate governance system is built upon a strong ethical foundation that supports producing precise and transparent financial statements.. Tony Cupertino faces ethical and legal responsibilities as a CPA and CIA. Tony Cupertino must decide whether he report the concerns to the chief financial officer or the audit committee. As the CIA, Tony must uphold the values set forth in the IIA Code of Ethics. Tony must maintain his objectivity and independence from management. The audit committee is responsible for the oversight of the financial statements. As an internal auditor, Tony can address his concerns directly to the audit committee and the audit committee will resolve differences with management. Although Tony’s boss Walter is the chief financial officer and sits on the board of directors, Tony does have the option of reporting the issue to Walter. As a board member it is Walter’s responsibility to safeguard corporate assets and make decisions in the best interest of the shareholders. The...
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