Ethics Team Case
Ethics Team Case: The Auditor
TEAM 4
Jaclyn Cancelliere Nicole Contu Linda DellaPia John McCool
Introduction
As presented by a young auditor working for a large public accounting firm, a Fortune 500 company has been exposed to some sizeable inconsistencies to their compensation procedures regarding a specific senior manager. The auditor discovers that the manager in question, referred to as Charles, is exclusively responsible for setting bonus targets for himself and his department. This alone poses a red flag in the mind of the auditor. In particular is the simple fact that a manager should not be solely responsible for the distribution of bonus targets for his own gratuity. …show more content…
She is faced with decisions regarding her career, her loyalty to the company and manager, and her profession as a certified public accountant. The auditor is faced with various alternatives that can be leveraged to alleviate the compromising situation that she has found herself to be in at this time. It is clear that one alternative will ultimately hold itself morally superior than the other alternatives, but careful analysis relating to general moral theory is needed to appreciate the arguments. As determined by our team, the auditor is faced with four alternatives to benefit the current situation that she finds herself in. Below is our thorough analysis of the four alternatives, which eventually leads to the morally superior …show more content…
Stated in the case are the facts that not only was Charles “responsible for setting the performance targets required for a bonus payout to both the employees in his department and himself,” but the auditor had also “quantified the bonus accrual to be misstated by several million dollars” (Case 1). In accord with the Utilitarianism argument represented in general moral theory, this misstatement directly relates to harmful consequences for both the individuals and society. When part of a large Fortune 500 company, financial statements are disclosed with the Securities Exchange Commission. Incorrectly reporting the financials not only places ramifications on the individuals responsible, in this case the auditing team and pertinent individuals from the company being audited at the time, but it relates directly to the stockholders of the company. Incorrect financial statements can cause a detriment to society as a whole seeing that investor’s in the company would potentially be investing in a company that was misstating their financials for
TEAM 4
Jaclyn Cancelliere Nicole Contu Linda DellaPia John McCool
Introduction
As presented by a young auditor working for a large public accounting firm, a Fortune 500 company has been exposed to some sizeable inconsistencies to their compensation procedures regarding a specific senior manager. The auditor discovers that the manager in question, referred to as Charles, is exclusively responsible for setting bonus targets for himself and his department. This alone poses a red flag in the mind of the auditor. In particular is the simple fact that a manager should not be solely responsible for the distribution of bonus targets for his own gratuity. …show more content…
She is faced with decisions regarding her career, her loyalty to the company and manager, and her profession as a certified public accountant. The auditor is faced with various alternatives that can be leveraged to alleviate the compromising situation that she has found herself to be in at this time. It is clear that one alternative will ultimately hold itself morally superior than the other alternatives, but careful analysis relating to general moral theory is needed to appreciate the arguments. As determined by our team, the auditor is faced with four alternatives to benefit the current situation that she finds herself in. Below is our thorough analysis of the four alternatives, which eventually leads to the morally superior …show more content…
Stated in the case are the facts that not only was Charles “responsible for setting the performance targets required for a bonus payout to both the employees in his department and himself,” but the auditor had also “quantified the bonus accrual to be misstated by several million dollars” (Case 1). In accord with the Utilitarianism argument represented in general moral theory, this misstatement directly relates to harmful consequences for both the individuals and society. When part of a large Fortune 500 company, financial statements are disclosed with the Securities Exchange Commission. Incorrectly reporting the financials not only places ramifications on the individuals responsible, in this case the auditing team and pertinent individuals from the company being audited at the time, but it relates directly to the stockholders of the company. Incorrect financial statements can cause a detriment to society as a whole seeing that investor’s in the company would potentially be investing in a company that was misstating their financials for