Ethics

Robyn Fenty, also known as Rihanna, is a recording artist and actress. Her career began at the tender age of 16 in Barbados, after she auditioned for Jay-Z. Throughout the years, her career has blossomed and she has became an international pop sensation. As a result, she needed help with her finances. She subsquently hired an accounting firm to manage her finances. In 2012, Rihanna filed a lawsuit accusing the accounting firm Berdon LLP of New York and two of the company’s accountant of breach of contract and negligence and among other things after firing the firm in 2010. The lawsuit comes after the singer is currently undergoing a costly audit by the IRS (Internal Revenue Service) over her tax returns from 2008 to 2010. As a result, she was forced to spend a significant amount of resources to correct the errors resulting from negligence of the accounting firm.

In Rihanna’s case, she trusted the accountants to manage her finance but the accountants failed to act appropriately. Furthermore, the accountant’s actions violated some of the code of ethical principles.

The first code of ethical principle that the accountants of Berdon LLP violated is the “Trust and Duties” code. In 2009, Rihanna embarked on the “Last Girl on Earth” tour in support of her album Rated R. Rihanna trusted the firm to act in her best interest in compliance with their duties but the accounting firm acted otherwise. Rihanna alleges that Berdon LLP defrauded her and her company, Tourihanna of millions of dollars in lost revenue and profits by hiding the actual state of her finances. In addition, the firm charged commission that was higher than her own income. Therefore, the firm made millions from her tour as a result of its gross mismanagement in which caused Rihanna lose a significant amount of money. Furthermore, the firm failed to act in the best interest of the client, which violates the “Trust and Duties” code.

The second code of ethical principle that the accountants of Berdon...