written.docx - CONFLICTING CLIENTS UNIVERSITY OF THE PEOPLE ROSHAN RAJBANSHI Introduction In every business organization management and employees are

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CONFLICTING CLIENTS UNIVERSITY OF THE PEOPLE ROSHAN RAJBANSHI
Introduction In every business organization, management and employees are constantly required to make decisions and choices as they carry out various task and activities for the organization, these decisions do not only directly affect the ethical culture of their organization but it also effect on the client’s, so the organization with poor ethical culture will also promote the same culture when serving their client’s which will lead to unethical practices. Relevant Facts Jennifer Grace was the engagement manager for Coshocton National Bank (CNB) tasked with reviewing their current year audit working papers relating to loan valuation and Fantastic Developments Inc is a private company which is a potential client of CNB who had applied for a loan with the bank. In the year prior to the engagement with CNB, Grace had previously carried out an audit for Fantastic Development Inc with knowledge of their recurring operating losses and struggling financial conditions. However, while auditing CNB, Grace noted a reference to Fantastic showing an excellent unaudited financial statement which may have been fraudulent as it does not reconcile with her knowledge of Fantastic’s financial conditions. Grace called Tom Ward, CFO of Fantastic to confirm the financial statement and he confirmed company has been doing well. Also, Fantastic had engaged a new CPA firm for it accounting and auditing needs, which even raised more concern if Fantastic was hiding something and if the unaudited financial given to CNB may be inaccurate. As Fantastic Development Inc is no longer a client of Grace’s firm there is no way she can confirm on the suspicion she has on Fantastic Inc and as it is a private company, they are not required to make their finances pubic. Ethical Issues This case study represents ethical dilemma and conflict between two parties of interest, as Grace is concerned with the financial condition of Fantastic Development Inc, which is her previous client, about the suspicion on the financial condition that it has shown to CNB for a commercial loan. And the audit staff disposed of

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