Aicpa Ethical Dilemmas

An implicit theme of this case that I want students to recognize is the contrast between the persistent and vigorous efforts of David Sokol to “get to the bottom” of the suspicious items he uncovered in JWP’s accounting records versus what Judge William Conner referred to as the “spinelessness” of JWP’s auditors. The JWP audits were similar to most problem audits in that the auditors encountered numerous red flags and questionable entries in the client’s accounting records but, for whatever reason, apparently failed to thoroughly investigate those items. On the other hand, Sokol refused to be deterred in his investigation of the troubling accounting issues that he discovered. The relationships that existed between members of JWP’s accounting staff and the Ernst & Young audit team apparently influenced the outcome of the JWP audits. Of course, the Sarbanes-Oxley Act of 2002

In the world of business, it is so obvious that Certified Public Accountants are playing an extremely important role to the public. Working as Certified Public Accountants, it is so special that they provide accounting professional services not to a specific person but to the whole public. Therefore, the ethics and conducts of the Certified Public Accountants becomes much more important because it affects the reasonable operation and successful development of the whole industry. So, as a professional accountant, we need take the duties that required by the AICPA code of ethics --- “professional competence, confidentiality, integrity, and objectivity".

When auditing a publicly held company, auditors need to observe principles. The ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of

“ In order to prevent fraudulent financial reports and statements, the American Institute of Certified Public Accountants(AICPA) has created ethical standards” (Ethical standards in a financial statement, 2011). These standards aim to make financial professionals accountable for their accounting practices. This includes the integrity of financial reporting and ensuring financial reporting is done fairly and factually. Financial accountants and professionals should maintain professional integrity, objectivity, and independence to reduce the risk of resulting legal action, loss of profits, and a poor reputation if improper financial reporting is done (Ethical standards in a financial statement, 2011).

This post will discuss two ethical accounting dilemmas that could occur in the CPA profession. For each dilemma, it will explain how the dilemma could be resolved based on logic and reason. It will then support that proposed resolution through support from the American Institute of Certified Professional Accountants (AICPA) Code of Professional Conduct.

The ethical dilemma that the National Collegiate Athletic Association (NCAA) faced in this case was prioritizing the rights of the individual as opposed to prioritizing the revenues of the organization. This could also be interpreted as a stakeholder versus shareholder situation in which the stakeholders are the student athletes and the shareholders are the universities that expect to earn revenue from their athletics teams. The NCAA has a responsibility towards both groups. As a national organization, they would want to protect the rights of the individuals in order to defend student athletes from exploitation and from being taken advantage of. This meant that students could not be used for advertising or marketing purposes. However, the NCAA

Accountants are held to a higher ethical standards and they must performed their duties in compliance with standards or ethical values of honesty, integrity, objectivity, due care, confidentiality, which must be fully committed to. They must put clients or public interest first before their own. They must have and ethical values and maintain those values way beyond what the society or the company’s code of ethic. It is important that accountants’ behavior or ethical values is in conformity with the

Accountants owe the duty to act in a professional and ethical manner concerning clients, as well an obligation to respect the laws that are involved with the profession. This is where a crossroads of ethics and legalities are formed and potentially the defining point of crucial decision-making. Stephen Richards and his actions under employment with Computer Associates (CA) are then examined in light of this concept.

There are two parts to the Certified Management Accountant's exam. The first part has 100 questions and 2 essay questions on the topics of external financial reporting decisions; planning, budgeting, and forecasting; performance management; cost management; and internal

Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the

This study aims to understand what effect has an ethical framework in accounting. In particular, we examine the influence of ethics on earnings management, financial reporting, and external accounting. Today, the commercial environment reveals the unethical behavior of management and accountants through the manipulation of accounting records to boost the company’s stock price, falsified financial statements to mislead investors, failure of auditors to correct errors and omissions due to client’s pressure and personal material interests.

Ethical issues have greatly transformed in our lives since the great Enron, Xerox and other huge corporations proposed big profits showing earnings of billions of dollars and yet in reality facing bankruptcy. These corporations faced great trouble with the federals and state for manipulating financial statements. But not only corporations can be blamed on this, accounting firms were involved in this as much as the corporations were. With the business stand point, ethics comprises of principles and standards that guide behavior. Investors, traders, customers, and legal system determine whether a specific action is ethical or unethical. Ethical issue is a vast subject, but we will look at the niche

With professions having this tremendous knowledge regarding a company’s financial standing and not being able to disclose the information to the public it can create major investment errors. With these restrictions in place by the AICPA the accountants and auditors “… in a position of having to choose between earning a livelihood or making a proper ethical choice” (Synder, 2011).

Ethics is a code of conduct and values that are accepted by society as being right and proper, it is a matter of making choices. For an accountant ethics is complying with all the relevant rules and regulations set by the FASB in the form of generally accepted accounting principles. Generally accepted accounting principles, or GAAP for short, are the accounting rules used to prepare and standardize the reporting of financial statements, such as balance sheets, income statements and cash flow statements, for publicly traded companies and many private companies in the United States. GAAP-based income is measured so that the information provided on financial statements is useful to those making economic decisions about a company, such as potential investors and creditors. Accountants are responsible for the validity of the financial statements they work on, and must perform their duties in accordance with all applicable principles, standards and laws. Ethics in accounting and business details the way in which a corporation represents itself to the world. Accountants representing these corporations have great responsibility to the company’s management, creditors, investors, regulatory bodies and to society. The duty to uphold principles, standards and laws of accounting is owed to the financial markets. The financial climate is driven by the financial reports of the companies they are representing. An accountant who does not uphold his responsibilities can have broad

In the world of business accounting, ethics plays a major role in the daily operations of a business. Not only are businesses responsible for incorporating ethical standards into their operations, but accountants are also responsible for ensuring they perform in an ethical manner. So often, there is a thin line between what is considered ethical and what is considered unethical, especially when a company is considering profit over ethics. However, top level professionals or accountants hold the power to set the tone at the top, lead by example, and provide a standard or code of ethics for peers to follow without hesitation that will ultimately lead to profits earned