Considering the fact that MGR still had two stores in some locations even after

Considering the fact that mgr still had two stores in

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Considering the fact that MGR still had two stores in some locations even after E&Y’s engagement, it would be a violation of the third standard of field work because it is clear that E&Y knew little about MGR’s situation. Given this case, it seems necessary to have certain standards for CPAs. One of the benefits of having formal standards for CPAs is that the clients of CPAs can expect a certain level of quality when they ask for services provided by CPAs. The standards might also give them better insights about what is professional and what is unprofessional, which will certainly help prevent this kind of cases from happening. A disadvantage would be that CPAs might take the standards as what they are without being critical of them at all, which can lead to serious problems if any of the standards was morally wrong. The relationships that they had with Rouse and Swidler could have been the reason why they made the auditing decisions that they made. For example, the reason E&Y only advised MGR to close a small number of stores could have been to make sure Rouse does not lose any significant amount of money from closing stores. Also, E&Y might have felt that they could get away with trivial misdeeds because of their close relationship with Swidler. If the abovementioned theories were actually true, then it is obvious that their acts were unethical.
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  • Spring '14
  • ARose
  • Financial audit, Interpersonal relationship, Hyun Jun Kim

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