Ethics Case_student-1

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Feb 20, 2024

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MGMT 443 - Auditing Spring 2024 ETHICS CASE Read the attached case and, as a group, provide one response to the issues presented. Recall that we reviewed ethical dilemmas in chapter 3 and developed an approach to evaluating the specifics of the situation (see accompanying rubric for guidance). APA format is required throughout your analysis (guidance has been posted on Canvas – please follow *all* APA formatting). You are not to have an abstract as part of your paper (the APA example has one). It is highly recommended that you follow the order used in the rubric. It is NOT necessary to provide a summary of the case (this would be a poor use of space). Your responses, in total, are limited to three double-spaced pages. Provide a separate title page with the names of all group members and your group number (this will not count as part of the three pages). You may use any sources that you feel will be helpful (other than UNM accounting professors, students in another group or former auditing students). You should use the “best” resources available (i.e., not Wikipedia). Your paper must contain a minimum of three outside sources and our textbook may not be used as a source. Any sources relied upon should be cited within the paper and listed as a reference at the end of your paper on a separate “References” page (this will not count as part of the three pages). Please feel free to seek assistance from the Business and Economics Librarian, Todd Quinn. He is a business resource and literature expert and will provide an in-class session on APA and article searches. You can use the link to access the guide for article searches and contact info/scheduling with Professor Quinn. https://libguides.unm.edu/accounting A peer evaluation form must be submitted for you to receive credit for this assignment. This information is confidential and I am the only one who will see this form. You are not to discuss the peer evaluation with other group members as doing so will result in a zero for this assignment. You will submit this form to me individually via your assignment folder on Canvas. Any errors (refer to instructions on peer evaluation form) associated with the submission of your peer evaluation form (or a late submission) will result in a 2-point penalty per day. You can make changes to your submission up to the due date, if necessary. The paper (in a Word file) is to be submitted via the Canvas assignment link by each group member. These materials and the peer evaluation are due by the 5:30 p.m. deadline on Wednesday, February 14 th . You may turn your material in early if you so desire (it is highly recommended that you do so in the event that there are any unforeseen circumstances). Please be sure that your submission is final/correct before submitting.
Avery’s Dilemma Avery is a senior accountant at a large firm, and she hopes to become a partner at the firm in the future. She has been assigned to the audit of a closely held corporation, MSA. Avery’s firm is also negotiating a large consulting contract with MSA. Avery has discovered multiple problems with MSA’s internal controls. First, MSA’s controller was fooled by an email phishing scam. The MSA controller wired money as directed by the phony email even though company policy required two signatures for such wire transfers. Second, the wired money was sent to a party that was not on the company’s vendor list. Third, MSA neglected to disclose to the auditors its close relationship with a business “entity” that shared its address and performed research and development at its direction. Avery believes keeping the entity off MSA’s books was possibly done to reduce the company’s reported expenses. Finally, MSA apparently failed to notice that when it sold a large shipment of products, the buyer had a contractual right to return thousands of them which could affect MSA’s ability to record revenue from the sale. Avery has been reminded by management and co-workers, if she wants to continue to be promoted, of how important it is to keep clients happy and bring in revenue for the firm. Avery is worried that disclosing all her findings will damage her firm’s relationship with MSA and, therefore, damage her ability to become a partner at the firm in the future. REQUIREMENTS : 1. What is the ethical dilemma? 2. Who are the stakeholders in the situation? 3. What are the internal or external constraints? 4. What courses of action are available in the dilemma described above? Identify at least three possible actions. 5. Discuss why each course of action may be ethical or non-ethical. 6. Which is the best course of action? Why?
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