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 that the negative evaluation does not stand.

This ethics case contains four key stakeholders that I can determine. The first key stakeholder is the accounting firm, Baker Greenleaf. Baker Greenleaf’s stake in this case has to do with the client...
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