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Paper 2

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Submitted By limakebi
Words 1071
Pages 5
Kehbila Lima

Issues in Accounting Research

Prof. Allen J. Rubenfield

Paper 2

The Jane, CPA Dilemma

Independence is perhaps one of the most important attributes of the public accountant. Before pursuing a course of action to resolve ethical dilemmas, a CPA may want to consult with legal counsel, applicable professional bodies, and appropriate firm or employer personnel. The AICPA[1] provides an ethics hotline to assist members in this and other ethics issues. Going through the case, one can see that there are a few breaches of some accounting rules and there is a dilemma about what exactly Jane’s responsibilities are and what she should do in this situation. What are Jane’s responsibilities? What are the issues in the case?

There is the question of ethics and responsibilities both as a member of the board of directors and also as a CPA. Should Jane disclose to the board about the financial position of her client? Or should she maintain client confidentiality and allow the bank to lend money to her client knowing her client is on the brink of bankruptcy? In my opinion, there was a breach of the ethics and responsibilities on the part of Jane as a CPA. In the following paragraphs, I will analyze the case and suggest what Jane should do or should have done.

To begin with, as a CPA, Jane is supposed to abide by the accounting laws. She is supposed to have known the rules concerning ethics and responsibilities. The AICPA’s bylaws require all members (those providing services as employees, owners, volunteers or consultants; those in public practice, business, academia or government) to comply with the ethical requirements of the AICPA’s “Code of Professional Conduct”. The code’s rules of conduct govern

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