Reference no: EM13692741

1. To whom do managers owe their allegiance? Is it to the shareholders? To other stakeholders (customers/creditors/vendors)? Employees or government agencies that regulate the business? Be sure to support your answer with ethical principles and examples.

2. 1. Susie, a newly graduated BBA in accounting, has started job with the state budgeting office. Susie has been placed over expense accounts. The state has a travel policy stating that a state employee may be reimbursed up to $90 per night for a hotel room and up to $40 per day for meals, as long as the employee turns in food receipts. On the first expense account Susie works on the employee has a hotel receipt for $130 a night but no food expenses. Susie processes the reimbursement for $90. The employee becomes irate as his reading of the travel policy is that he can be reimbursed for $130 a night for hotel and food with a receipt. The employee claims this has never been a problem in the past and has always been reimbursed $130 a night whether for hotel only or both hotel and food.
Discuss which ethical theory supports Susie and the employee's take on the travel policy. Which would you choose and why?
2. As an executive in a mid-sized manufacturing firm, Cal finds himself thrown together with Harry, who works for a unit Cal oversees. He and Harry are in the same community; their children are in the same schools; they often show up at the same social functions; and they play golf together fairly frequently.
One day, to Cal's deep dismay, he hears that Harry had been implicated in some financial irregularities at work. The issues while serious leave some room for doubt. There is reason to think Harry got ensnared by regulations, though he may have afterwards tried to cover up that entanglement by being less than forthright. Yet after what Cal observes to be a careful audit and investigation, Harry is let go from his job.
Harry comes to Cal and asks for a letter of recommendation.
What should Cal do? What are the consequences of the options?
3. As a professional working for a large electronics firm, Stan found himself riding a roller coaster of concern about lay-offs. Every few years, top management slashed jobs as work slacked off - only to hire again when things were looking up. So when Stan and his team members noticed that the executives were again meeting behind closed doors, they suspected the worst.
Stan's boss revealed to Stan that Stan's team member Jim was slated to lose his job. However, it was made plain that Stan was to keep that information confidential.
Not long after that conversation, Jim approached Stan and asked whether he could confirm the rumor that he would be laid off.
What should Stan do? With what values is Stan dealing? What are the consequences of Stan's choices?
4. An Internet Company has a chance to expand its business into a developing country. This chance would make money for its shareholders, as it would be the first Internet Company allowed in the country. However, the conditions demanded by the country is that the Internet Company must turn over to the government the history of Internet sites visited by its citizens. Additionally the Internet Company must also censor Internet sites requested through the search engine. In the United States and other countries, the Internet Company would not monitor, censor, or turn over a history of Internet sites to any government.
What should the Internet Company do? Use ethical theories to back up your decision.
5. As part of a required ethics course, students were required to take an online 90 minute ethics final. Facing graduation and many pressures with starting new jobs and moving, the students worked together to complete the final. Since the essays were all closely worded the same, the instructor could determine that some sort of cheating on the ethics exam had taken place. What should the school, instructor and students do? Would the suggested solution be different if the school had an honor code?

3. 1. What is the role of a code of professional conduct and standards of ethical behavior for accountants and auditors?
2. Fully explain all reasonable steps that should be taken by an internal accountant when there is a difference of opinion with one's supervisor on an accounting or financial reporting manner.
3. Steve is quickly moving up in the accounting department of RAC Inc. It is yearend; he has just received news that the estimates of the estimated useful life and salvage values were wrong and must be changed. Of course, that changes the depreciation expense and accumulated depreciation. Steve calls his wife to explain why he will be late again. Now is he is pondering on a comment his wife made. She said "I'm no accountant; but after four years, you would think that the company could get done how its estimates affect expenses and those other accounts." What might the company be doing and what should Steve do from an ethical reasoning view?

4. A student states that as long as the auditor has followed all applicable laws, then the auditor has been ethical. Do you agree? Why or why not?

4. 1. Integrity is said to be the backbone of ethical behavior. How does the integrity requirement of CPAs affect the performance of professional services by: (a) a controller of a corporation and (2) the internal auditor of a company and (3) the external auditor? Describe a situation where each professional's integrity may be challenged.

2. On January 16, 2008, the SEC charged two former employees of PricewaterhouseCoopers LLP with insider trading. According to the SEC's complaint, Gregory B. Raben, a former PwC auditor, and William Patrick Borchard, a former senior associate in PwC's Transaction Services Group, used their access to sensitive information about PwC's clients to allow Raben to buy stock ahead of a series of corporate takeovers. According to the complaint, Raben netted trading profits of more than $20,000 by buying stock ahead of public announcements disclosing the acquisitions and then selling his shares. Is there anything wrong with a CPA using insider information? Evaluate the actions of Raben and Borchard from an ethical perspective.

3. Explain the advantages and disadvantages of establishing one set of accounting standards (IFRS) to be followed by all companies around the world.