Acc260 Solving Ethical Dilemmas in the Accounting Profession

Topics: Ethics, Accountant, Audit Pages: 3 (1091 words) Published: September 21, 2010
Final Project: Solving Ethical Dilemmas in the Accounting Profession Laurie Searing
ACC/260
July 25, 2010
Hope Piggee

Solving Ethical Dilemmas in the Accounting Profession
This dilemma in this ethical case is whether or not Daniel Potter (Dan), staff accountant for Baker Greenleaf accounting firm, should report unethical changes his immediate supervisor, Oliver Freeman, made to an audit report. The problem is that a large piece of real estate was valued on the balance sheet at $2 million. Dan had estimated the property at $100,000. Dan based his value estimate on the condition, location, and how long the property had been vacant. He approached the managers of the subsidiary with a proposal to write down the value of the property by $1,900,000. The managers refused to the write down and commented that currently there was a prospective tenant for the parcel (Brooks, 2007). The American Institute of Certified Public Accountants (AICPA) has materiality regulations. Those regulations say that if there is a difference of opinion between the client and the auditor that affects the net income by more than 3%, then that difference is material and must be disclosed in the Certified Public Accountants (CPA) opinion. This specific client is a subsidiary of a larger company. The material difference to the subsidiary is a 7% impact to the net income, although the impact to the parent company’s consolidated net income is only 1%. Dan turned in the report with the subject to opinion designation because his client is the subsidiary and the material difference was more than the 3% allowed by AICPA regulations. He took his concerns to Oliver Freeman and was told to remove the subject to opinion designation as well as the pages relating to his estimated value of the piece of property. He was also told to issue a clean opinion and state that the real estate values are correct. Dan stuck to his fiduciary duties of integrity, honesty, and legality by submitting the report with...

References: Brooks, L. J. (2007). Business & professional ethics for directors, executives, & accountants (4th ed.). Mason, OH: Thomson Southwestern. Retrieved July 22, 2010 from University of Phoenix Student Website
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Solving Ethical Dilemmas in the Accounting Profession
  • Essay on Solving Ethical Dilemmas in the Accounting Profession
  • Essay on Solving Ethical Dilemmas
  • Solving ethical dilemma Essay
  • Essay about Analysis of an Ethical Dilemma
  • Essay on Ethical Dilemma
  • Ethical Dilemma: Child Bride Research Paper
  • Ethical Dilemmas Essay

Become a StudyMode Member

Sign Up - It's Free