Accounting ethics | Accounting homework help

  

Assume Ethan Lester and Vick Jensen are CPAs. Ethan was seen as a “model employee” who deserved a promotion to director of accounting according to Kelly Fostermann, the CEO of Fostermann Corporation, a Maryland-based, largely privately held company that is a prominent global designer and marketer of stereophonic systems. The company has an eleven person board of directors.

Kelly considered Ethan to be an honest employee based on performance reviews and his unwillingness to accept the promotion, stating that he wasn’t ready yet for the position. Kelly admired his willingness to learn and grow, not just expect a promotion. Little did she know that Ethan was committing a $50,000 fraud during 2018 by embezzling cash from the company. In fact, no one seemed to catch on because Ethan was able to override internal controls. However, the external auditors were coming in and to solidify the deception, he needed the help of Vick Jensen, a close friend who was the accounting manager and also reports to Ethan. Ethan could “order” Vick to cover up the fraud but hoped he would do so out of friendship and loyalty. Besides, Ethan knew Vick had committed his own fraud two years ago and covered it up by creating false journal entries for undocumented sales, returns, transactions, and operating expenses.

Ethan went to see Vick and explained his dilemma. He could see Vick’s discomfort in hearing the news. Vick had thought he had turned the corner on being involved in fraud after he quietly paid back the $20,000 he had stolen two years ago. Here is how the conversation went.

“Vick, I need your help. I blew it. You know Mary and I split up 10 months ago.”

“Yes,” Vick said.

“Well, I got involved with another woman who I tried to impress by buying her things. I wound up taking $50,000 from company funds.”

“Ethan, what were you thinking?”

“Don’t get all moral with me. Don’t you recall your own circumstances?”

Vick was quiet for a moment and then asked, “What do you want me to do?”

“T need you to make some entries in the ledger to cover up the $50,000. I promise to pay it back, just as you did. You know I’m good for it.”

Vick reacted angrily, saying, “You told me to skip the bank reconciliations—that you would do them yourself. I trusted you.”

“I know. Listen, do this one favor for me, and I’ll never ask you again.”

Vick grew increasingly uneasy. He told Ethan he needed to think about it… his relationship with the auditors was at stake.

1. Identify the stakeholders in this case and their interests. Give one example where their interests may coincide, and one example where there may be in conflict.

2. According to the Fraud Triangle depicted in chap 5 of the textbook, what are the pressures or incentives facing Vick Jensen? What opportunity does he have to commit fraud? What rationalizations is he likely to consider?

3.  Describe the ethical and professional responsibilities of Vick Jensen by applying Exhibit 3-11 from the textbook to the case. What concrete steps does he need to take?

4.  If Jensen agrees to go along with Lester’s request, which provisions of the AICPA code of conduct and the IMA Statement of Ethical Professional Practice (see the most recent version for the IMA at https://www.imanet.org/-/media/b6fbeeb74d964e6c9fe654c48456e61f.ashx) will he be violating? What does Jensen stand to lose?

5. Assume you are Jensen and you decide not to cooperate with Lester’s request. Using the Giving Voice to Values technique (see Mintz & Morris chap 2), write a dialogue between you and the person whom you selected to discuss this situation. Include the following elements in your dialogue:

• What do you need to say, to whom, and in what sequence?

• What will the objections or pushback be?

• What would you say next? What data and other information do you need to make your point and counteract the reasons and rationalizations you will likely have to address?

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more