Case Study : Candy Bookit, A Non Partner Manager Cpa

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Aman Shrestha December 9, 2014 Final Case Study 1) Candy Bookit, a non-partner manager CPA, left her CPA firm to work for Artifice Company, a holding company for a group of family owned corporations. The company is engaged in government projects and their large projects involves government financing. The corporations file separate tax returns. Candy had been a part of Artifice’s review engagement team while at the CPA firm and had developed close relationship with the family. She discovered a number of checks that were paid to Mr. Munster by the Darkside Unit of the company as consulting fees. These fees were billed to the government projects. At the same time, she discovered checks worth $2.5 million deposited into Underground Projects…show more content…
She quit her job as she could not approve of the check deposits and could not change the company’s practices. 2) Relevant ethical issues in order of sequence: • Interrelated business activities • Tax return issues • Conflict of interest • Transfer of funds between business units • Adherence to GAAP • Lack of internal controls • Tax evasion • Misrepresentation of facts • Discreditable acts • Abuse of power • Breach of confidentiality • Disregard for responsibilities to the profession • Disregard for public interest • Whistleblowing Relevant ethical issues in order of importance: • Conflict of interest • Interrelated business activities • Tax return issues • Transfer of funds between business units • Misrepresentation of facts • Adherence to GAAP • Tax evasion • Discreditable Acts • Lack of internal control • Breach of confidentiality • Disregard for public interest • Whistleblowing • Abuse of power • Disregard for responsibilities to the profession 2) a) Ethical issues and case facts: • Interrelated business activities: All of the business units were part of a single holding company owned by family members. Also, the business units were interrelated in a sense that they performed different parts of a single project. There is no information that talked about the preparation of a consolidated financial statement. • Tax return issues: The Company filed separate tax returns for its business units even though there it is a single
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