Mini$-$Case $($This continues on to the next page$)$ total of $15$ points

Lisa is returning to her job as an accountant at Albright Company $$ a small, family$-$run office supplies chain $$ after a three$-$year break to stay home with her child during Covid. She$$s coming back at an important time $$ it$$s tax season!

As she looks over the records for the time that she was gone, Lisa notices little oddities that suggest the company has been reporting much less income than they have actually made in the last two years. Troubled by this, Lisa approaches the company owner. He comes clean, admitting that he has been altering the books because of a personal financial problem that he was experiencing. The owner promises that from now on$,$ especially with Lisa back, he will no longer try to reduce his tax liability $$ both he and the company are in a better place now. However, he also makes clear to Lisa that he cannot afford to pay the back taxes and the penalties that the IRS would assess on them.

If Lisa reports this situation to the tax authorities, the company may close. If it later comes out that she didn$$t report it$,$ she could lose her license to practice as a CPA.

What is the ethical issue here? Is it common for the owner or manager of a company to be involved in this type of activity? Why is that so$?$

What do you think might have led the company owner to take the actions that he did? $($Offer at least $3$ pressures that individuals can experience that would lead to this$)$

What are the steps that Lisa could take in this situation?

What do you think YOU would do in her place?