Db Thread 1

Jonathan Miller

ACCT 612 Module 2

DB 1

October 30, 2014

AHI Corporation: Ethical Issues and “Float Payments”

It is not uncommon for accountants to face ethical decisions when representing their clients and having to decide how to act with the facts such as those presented. Elm and Radin explain that ethical decision making, for accountants especially, is not a special trait but overwhelmingly a simple process that clearly knows immediate right from wrong and instinctual decisions of what to do (Elm & Radin, 2011). This particular situation is about AHI Corporation trying to take advantage of a “float” period of paying their tax return payments by deliberately directing the payment to another location before finally ending up to the IRS. The company would in effect gain interest every day until the check cleared for the payment. One might say that as long as the business completes the transaction to the IRS by the due date, pays in full and has not mislead third parties guidance on their returns they should not have repercussions on this transaction. However, for the CPA there are a number of issues of ethical integrity that must be analyzed before allowing the company to knowingly go through with the transaction. Looking ahead, this transaction could lead to late a late payment to the IRS, misrepresentation of the CPA’s conduct on the transaction and concealing of the facts about intentionally not filing properly to the IRS.

As a representing CPA, I would not accept the transaction and refuse to sign off or complete the transaction if it required my participation. CPA’s are guided by the rules and standards set by the AICPA Code of professional conduct, Regulations Governing Practice of the IRS and the Statements of Standards for Tax Services (SSTS) (Sawyers, Raabe, Whittenburg, & Gill, 2015). Each of these standards for actions of CPA defines different decision making tools for the CPA to follow in given circumstances. The decision tree...