Accounting

1. How would you respond to Coleman’s request? Be sure to cite research that supports your position.

I would not honor Coleman’s request. As a CPA it is important to follow the AICP Code of Professional Conduct. With that being said Rule 102 states, “In the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others (IRS). A CPA should maintain objectivity and integrity, avoiding any potential or existing conflicts of interest. It is important for the CPA to notify the Shark Corporation of the misrepresentation of facts.

2. What if you have already told the other side that the building is fine when you learn about the problems?

If I have already told the other side that the building is fine when I learned about the problems I would notify the Shark Corporation of the misrepresentation of facts. If Shark Corporation still decided not to tell the condition of the build I would resign from the engagement with the Shark Corporation.

3. What other potential ethics issues do you see in this situation?

The potential ethics issues I see in this situation is the misleading information of the building and Coleman telling me not to mention the substantial hidden damage because it would be more favorable to Shark’s position in the transaction.

4. Which AICPA Code(s) of Professional Conduct rules apply in this situation (explain how and why they apply)?

The AICP Codes of Professional Conduct rules that apply in this situation are Rule 102: Objectivity and Integrity and Rule 301: Confidential Client Information. Rule 102 states, “In the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others (IRS). Integrity is very important because it is the...