Week 9-Solving Ethical Dilemmas in the Accounting Profession

Week 9-Solving Ethical Dilemmas in the Accounting...

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Solving Ethical Dilemmas in the Accounting Profession 1 Solving Ethical Dilemmas in the Accounting Profession Melissa Krol ACC 260 August 5, 2010 Instructor: Lyndon Ford Axia College of University of Phoenix
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Solving Ethical Dilemmas in the Accounting Profession 2 Solving Ethical Dilemmas in the Accounting Profession Daniel Potter is a staff accountant at Baker Greenleaf, a Big Eight accounting firm. His ethical dilemma arose when assigned to perform a special audit of a wholly-owned real estate subsidiary. Dan upon performing the audit found many problems and managed to solve all but one. The subsidiary had a property listed on its balance sheet at a value of $2,000,000 and Dan’s estimate of this property’s value is only $100,000. Dan proposed to write down the value of the property by $1,900,000 but the Subsidiary’s managers were not in agreement with this proposal. Therefore, Dan turned in his report with a recommendation that the audit be filed with a subject-to-opinion provision. Dan’s supervisor, Oliver Freeman, was not pleased with this recommendation and wanted Dan to remove his estimate of the real estate property, express an opinion that all real estate properties were properly evaluated by the subsidiary, and remove the subject-to-opinion provision and replace it with a clean opinion. Several days after his meeting with Oliver, Dan discovered that Oliver had pulled his analysis from the file and replaced it with a clean opinion. This did not sit well with Dan because according to AICPA regulations any difference in opinion between the client and account that affects the income statement by more
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Week 9-Solving Ethical Dilemmas in the Accounting...

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