ACCT 630 Period 3

Dialogue Post Week 5

The Case:

Stan Misuse, a “model employee,” is up for a promotion to CFO at Much Corporation. What the CEO, John Much, doesn’t know is that Stan has been embezzling $50,000 from the company. With auditors on the way, Stan seeks help from his friend and accounting manager, Ryan Helper, to cover up the fraud. Stan knows Ryan has committed his own fraud in the past and uses this knowledge to pressure Ryan into helping him. Ryan is uncomfortable with the request, having previously paid back the $20,000 he stole and wanting to avoid further wrongdoing.

The Dialogue Question:

Proverbs 17:17 says, “A friend loves at all times, and a brother is born for a time of adversity.” This verse highlights the importance of loyalty and support. However, in professional life, loyalty to a friend can conflict with ethical duties.

In the case of Stan and Ryan, discuss how Stan is attempting to use loyalty to a friend to justify an unethical act. Explain the moral and professional dilemma Ryan faces. What are the potential consequences for Ryan if he helps Stan, and what are the ethical obligations of a professional in this situation? Use an ethical framework to explain what Ryan should do, and how his decision, whether to help or not, reflects his personal integrity.

Dialogue Post Week 6

The Case:

Josh, a CPA, is facing a lawsuit from a client, Small, Inc., and its bank, Big Bank, after a fraud was discovered that he failed to detect during an audit. An employee was stealing inventory, and the company had falsified accounts receivable confirmations. The company is now facing bankruptcy and has defaulted on its loan to the bank. The bank is suing Josh for negligence, claiming he did not exercise due care in the audit.

The Dialogue Question:

Luke 16:10 states, “Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.” This spiritual principle emphasizes the importance of faithfulness and responsibility in all matters, no matter how small.

In the case of Josh, analyze the auditor’s responsibilities regarding inventory and accounts receivable in accordance with Generally Accepted Auditing Standards (GAAS). Explain how a lack of due care in these areas could be a failure of professional responsibility. Evaluate whether Josh is liable to either Small, Inc. or Big Bank, and discuss the defenses he may have against these claims. How does the principle of faithfulness in small things, as outlined in scripture, apply to an auditor’s duty of due care and professional skepticism?

Note: For each discussion period, you are required to create 2 Original posts (200 words or fewer each). Each post must include a minimum of two academic references