Ethics Case Dilemma

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ETHICS CASE Dilemma of an Accountant In 1976 Senator Lee Metcalf (D-Mont.) released a report on the public accounting industry which rocked the profession. Despite a decade of revisions in rules and regulations (variously established by the Securities and Exchange Commission, Accounting Principles Board, and Financial Accounting Standards Board), public accounting firms were still perceived by many on Capitol Hill as biased in favor of their clients, incapable of or unwilling to police themselves, and at times participants in coverups of client affairs. Senator Metcalf even went so far as to suggest nationalizing the industry in light of these activities. Just prior to the Metcalf report, Daniel Potter began working as a…show more content…
Oliver Freeman, the project senior, assigned Dan to audit a wholly-owned real estate subsidiary (Sub) which had given Baker a lot of headaches in the past. “I want you to solve the problems we’re having with this Sub, and come out with a clean opinion (i.e., confirmation that the client’s statements are presented fairly) in one month. I leave it to you to do what you think is necessary.” For the first time Dan was allotted a subordinate, Gene Doherty, to help him. Gene had worked with the project senior several times before on the same client’s account, and he was not wholly enthusiastic about Oliver’s supervision. “Oliver is completely inflexible about running things his own way—most of the staff accountants hate him. He contributes a 7:00 A.M. to 9:00 P.M. day every day, and expects everyone else to do the same. You’ve really got to put out, on his terms, to get an excellent evaluation from him.” Oliver was indeed a strict authoritarian. Several times over the next month Dan and Oliver had petty disagreements over interpretive issues, but when Dan began to realize just how stubborn Oliver was, he regularly deferred to his superior’s opinion. Three days before the audit was due, Dan completed his files and submitted them to Oliver for review. He had uncovered quite a few problems but managed to solve all except one: one of the
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