Creve Couer Pizza, Inc
1. Discuss whether or not CPAs who provide accounting, taxation, and related services to small businesses have a responsibility to serve as the “moral conscience” of their clients.
Yes, CPAs have the responsibility to serve as the “moral conscience” of their clients. This is especially important during the times when clients may try to “test the waters” so to speak, when advising the CPA to make questionable changes or alterations to clients’ financial documents. The AICPA Principles of Professional Conduct states that CPAs should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism (Knapp, Rittenberg, Johnstone, & Gramling, 2011). It is the CPAs responsibility to advise all clients as to when certain activities may cross the line of being unethical and be made known that such actions are inappropriate and unacceptable.
2. Discuss whether or not auditors have a moral or professional responsibility to turn in clients who are cheating on their taxes and violating other laws.
Auditors definitely have the responsibility to turn in any clients who are cheating on their taxes and violating other laws. If the auditor knowingly “covers up” these finding, he is behaving unethically. This is when moral judgment comes into play. Auditors should began all of other their client audits with a high level of professional skepticism, and in doing so this will allow the auditor to provide due care while acting diligently and in accordance with professional standards.
3. Assume that you are Jess in the second hypothetical scenario presented in this case. Discuss how you would respond to your friend’s suggestion that you become a controlled informant for the IRS.
Admittedly, the offer in which Rick is providing Jess with is quite tempting, if I were Jess, I would advise Rick that I must remain objective and adhere to high ethical standards. I would remind Jess of the media frenzy
Yes, CPAs have the responsibility to serve as the “moral conscience” of their clients. This is especially important during the times when clients may try to “test the waters” so to speak, when advising the CPA to make questionable changes or alterations to clients’ financial documents. The AICPA Principles of Professional Conduct states that CPAs should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism (Knapp, Rittenberg, Johnstone, & Gramling, 2011). It is the CPAs responsibility to advise all clients as to when certain activities may cross the line of being unethical and be made known that such actions are inappropriate and unacceptable.
2. Discuss whether or not auditors have a moral or professional responsibility to turn in clients who are cheating on their taxes and violating other laws.
Auditors definitely have the responsibility to turn in any clients who are cheating on their taxes and violating other laws. If the auditor knowingly “covers up” these finding, he is behaving unethically. This is when moral judgment comes into play. Auditors should began all of other their client audits with a high level of professional skepticism, and in doing so this will allow the auditor to provide due care while acting diligently and in accordance with professional standards.
3. Assume that you are Jess in the second hypothetical scenario presented in this case. Discuss how you would respond to your friend’s suggestion that you become a controlled informant for the IRS.
Admittedly, the offer in which Rick is providing Jess with is quite tempting, if I were Jess, I would advise Rick that I must remain objective and adhere to high ethical standards. I would remind Jess of the media frenzy
References: Knapp, M.C., Rittenberg, L.E., Johnstone, K, & Gramling, A. (2011). Advanced auditing. Mason, OH: Cengage Learning.