Over the past fifteen years the accounting profession has been hit with a number of scandals. Many of the accounting scandals were due to the attitudes and actions of some of the top executives at some of the largest accounting firms and financial institutions. Their actions led to company closures, clients enduring difficulties and stock market failures. The profession which was once known as a highly trustworthy profession has had their ethical, technical and moral standards questioned. Many of the scandals led to changes in the profession. “In 2002 President George W. Bush signed into law the Sarbanes Oxley Bill, which imposes a number of corporate governance rules on public traded companies (Duggan, 2008). The act passed by Congress addressed corporate accountability in response to the scandals which began to undermine citizens’ confidence in U.S. business (Schroeder, Clark, & Cathey, 2009).” The bill passed by Congress led to the establishment of the Public Company Accounting Oversight Board (PCAOB). One of the onuses of PCAOB is to perform duties or tasks essential to promoting high professional standards and improve the quality of services offered by accounting firms and the Certified Public Accountants (CPA) associated with these firms.
Throughout your career as a CPA, you will be faced with making challenging decisions. Many of those challenging decisions may bring about what some may consider an ethical dilemma. When faced with an ethical dilemma you may question yourself when deciding the “right” action to take. In order to uphold your professional standing as a CPA, you are required to comply with the American Institute of Certified Public Accountant (AICPA) Code of Ethics. The AICPA’s Code of Ethics outlines what the profession considers a CPA’s ethical and professional responsibility to clients. Ethical dilemmas come in many forms and do not always have a prescriptive or clear-cut response. For example, someone could be pressuring you into misrepresenting facts, compile reports that are misleading or a material misstatement of generally accepted accounting principles. While working within the day-today operations of the company, you may be presented with a check request along with supporting documentation requiring you to sign as a primary or secondary signatory. The following illustrates a scenario in which you may be faced with:
You recently moved to a prominent city for vacationers in hopes of furthering your career after graduating from the University of North Texas at Dallas (UNTD), and upon successfully passing of the Certified Public Accountants (CPAs) exam. After months of searching you finally secure gainful employment as a CPA at a local family-owned hotel. The day-to-day management decisions and operations of the business were mainly decided by Jack and Jill, who are brother and sister.
Two weeks into the 90-day probationary period, you discover the company has been facing financial difficulties, which includes...