ACC260 Final Decision Framework

ACC260 Final Decision Framework - ACC260 Accountants...

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ACC260 – Accountant’s Dilemma Final Daniel Potter is a staff accountant at a Big Eight accounting firm, Baker Greenleaf. Daniel reports a solid value system in which he aligns with his career. He is valued at Baker Greenleaf, and has quickly climbed the ladder; obtaining promotions within the company. Daniel came face to face with a tough dilemma when he was assigned to conduct a special audit for a longstanding client that was shared by another Big Eight firm. Due to the nature of the audit, Baker Greenleaf considered Daniel one of their best alongside Daniel’s superior, Oliver
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Freeman. Freeman assigned Daniel to audit the client’s wholly-owned real estate subsidiary. The forethought by Baker was that the audit would produce a favorable performance and thus secure the account permanently with the firm. Oliver Freeman announced his expectations of Daniel clearly during the assignment of the sub. Freeman expected Daniel to deliver a clean opinion on the analysis of the sub. While performing the audit, Daniel found a discrepancy with the value of the Sub’s largest real estate properties. The Sub had valued the property at $2 million on their balance sheet, and Daniel had estimated the value of that property to be much lower. Since the property was a dilapidated building in a bad location and had been vacant for a number of years, Daniel estimated the value to be $1.9 million less than what the Sub had valued it at. Daniel spoke with the managers of the Sub about writing down the value of the property by what he had estimated, and they refused. Daniel decided to submit his analysis with a “subject-to-opinion” designation since he and the client had a difference of opinion. Oliver wanted to see a “clean opinion” in the case of the audit, but Daniel refused to change it because that violated accounting regulations. Since Daniel would not change his analysis, Oliver took it upon himself to pull the analysis and change it to a clean opinion. Oliver also issued a negative evaluation on Daniel’s performance of the audit.
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ACC260 Final Decision Framework - ACC260 Accountants...

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