With respect to the Armadillo Foods case in this chapter, let’s assume that the controller is instructed by the CFO that to “make the numbers” the company must increase EPS by $.02 per share. This sounds innocent enough and it is only a five percent increase. Does the relative size of the increase make any difference in deciding whether to increase EPS by $.02? Would you go along with the demand of the CFO? What ethical issues should you consider in deciding on a course of action? Assume you discover that top management supports the CFO’s position because it would lead to bonuses for themselves. Under what circumstances might you consider blowing the whistle in this case?
Answer to relevant QuestionsWhat is the danger from an ethical perspective of having a CPA firm that conducts the audit of a public company also engaged in consulting with the company on the installation of a new financial information system? What ...On January 16, 2008, the SEC charged two former employees of PricewaterhouseCoopers LLP with insider trading. According to the SEC’s complaint, Gregory B. Raben, a former PwC auditor, and William Patrick Borchard, a former ...1. Do you think it is ethically appropriately for Wanda David to provide tax services to Wiz, an audit client and customer of her employer, Gee, LLC, at the same time she works for the audit firm and is part of the audit ...AU 240 points to three conditions that enable fraud to occur. Briefly describe each condition. How does one’s propensity to act ethically as described by Rest’s model of morality influence each of the three elements of ...According to GAAS, the auditor must evaluate the control deficiencies that he has become aware of to determine whether those deficiencies, individually or in combination, are significant deficiencies or material weaknesses. ...
Post your question