Dave Gordon FCA, Senior Partner in one of the large public accounting firms, is in a quandary. He has just realized that, although he has followed the Ontario Institute of Chartered Accountants’ Rules of Conduct with respect to advising the incumbent auditor when he has been asked to undertake an assignment other than a financial statement audit from the incumbent’s client (and has always done so), that many of the other partners in his firm and, in fact, probably many partners in most of the larger firms are not following the rule. A particular concern to Dave is that several times the incumbent auditors of prospective clients have objected to his firm undertaking the work and have spoken to the client with the result that his firm was not retained. In short, his firm has lost business because he has followed the rule. Dave is preparing a memo to his partners and is puzzled as to what course of action his firm should follow. He has informally discussed the rule with his peers at the other larger firms and they have indicated that they feel the rule is not important and that they do not propose to change their firm policy with respect to it. On the other hand, he believes his firm has always prided itself on being a stickler for following the "letter of the law."

Every accounting firm has its approach to ethical situations with clients and employees. Dave Gordon, FCA, Senior Partner was to advise the incumbent auditor on the financial situation at a client. He has been noticing that many of the other partners in his firm are not following the rules with respect to transitioning to a new client.

Evaluate the case study to assess ethical reasoning using Kohlberg's Stages of Moral Development from Dave Gordon's point of view.

Include in your evaluation:

1. Using Rest's Four Component Model describe which components were actually present in this case and where the failures occurred.
2. How could Dave use Rest's model to make ethical decisions?
3. According to Kohlberg's theory, which stages are present in the decision-making process?
4. How might a better understanding of Kohlberg's theory help this situation?
5. Can Dave justify the loss of business as a right decision in view of firm goals?

Answer rating: 100% (QA)

Answer What should Dave suggest to his fellow partners in the firm and why Dave should suggest to fe... View the full answer