When Is Resignation Not Enough—an Ethical Dilemma

3887 WordsNov 10, 201016 Pages
When is Resignation not Enough—An Ethical Dilemma FACTS The case “When is Resignation not Enough” details an ethical dilemma encountered by Page Nolan. She left Smith, Jones, & Brown (SJB) CPA firm in 1989, to go into private business. Anonymous Company (AC) hired Page as a controller. Page’s job requirements were to ensure accounting books of interrelated business were correct, income and expenses were properly recorded and assigned, and government requirements were met. Anonymous Company is owned in part or in full by the Green Family and comprised of twenty interrelated small businesses. AC was a client of SJB, and Ms. Nolan previously worked on projects for AC. At SJB, Ms. Nolan was involved with the review that was designed to…show more content…
AC has not implemented a whistle-blowing system or compliance hotline, in fact, an ethics or audit committee does not exist. In general, the company does not have any fraud prevention program, code of ethics, or a committee to oversee the management of the company. Page Nolan took couple of steps to communicate the contradictions in the process; however, she was unsure of her professional and ethical responsibilities after not receiving the appropriate response. The following AICPA Rules of the Code of Professional Conduct apply to her ethical dilemma:  Rule 102: Integrity and Objectivity  Rule 202: Compliance with Standards  Rule 203: Accounting Principles  Rule 301: Confidential Client Information Ms. Nolan must comply with rules in order to pursue or resolve the questionable tactics utilized by Anonymous Company. ACCOUNTING ISSUES Financial statements must be prepared in accordance with Generally Accepted Accounting Principles to the interested users or stakeholders. GAAP are developed by Financial Accounting Standards Board (FASB), Federal Accounting Standards Advisory Board (FASAB), Governmental Accounting Standards Board (GASB), and American Institute of Certified Public Accountants (AICPA). These standard setting bodies make it possible for statements to be compared and stated accurately. It is important to have honest management and accounting firm to enforce these set of rules established by the governing bodies in order to

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