D550 – Ethics for Accountants
Name – Student ID
Task 1
A. Ethical Decision-Making Model
Narrative
1. Identify the ethical and professional issues
(ethical sensitivity):
- GAAS
A deficiency in the client’s inventory system was found which
lead to the double counting of some inventory items.
The amounts are not large, but GAAS requires these
deficiencies be reported to management so that action can be
taken to correct the problem in the system that led to the
double counting.
- Stakeholders/Interests
The client
The auditors
09:34:32 GMT -06:00
, The investors
- Ethical/Professional Standards
Due Care: Auditors need to be professional and thorough when
performing their duties.
Integrity: Barbara should not allow the objections of the
majority, time pressures, personal embarrassment, or
other factors, persuade her to act against her own
professional judgment.
2. Identify and evaluate alternative courses of action
(ethical judgment):
- Legal Issues:
By violating GAAS and ignoring problems, the audit company
may be exposed to legal consequences, especially if the
deficiency turns out to be more serious than originally thought.
- Alternatives/Analysis
Go along with the majority:
o Barbara feels uncomfortable with this decision and knows
she would be violating GAAS by deferring her judgment to
09:34:32 GMT -06:00
Name – Student ID
Task 1
A. Ethical Decision-Making Model
Narrative
1. Identify the ethical and professional issues
(ethical sensitivity):
- GAAS
A deficiency in the client’s inventory system was found which
lead to the double counting of some inventory items.
The amounts are not large, but GAAS requires these
deficiencies be reported to management so that action can be
taken to correct the problem in the system that led to the
double counting.
- Stakeholders/Interests
The client
The auditors
09:34:32 GMT -06:00
, The investors
- Ethical/Professional Standards
Due Care: Auditors need to be professional and thorough when
performing their duties.
Integrity: Barbara should not allow the objections of the
majority, time pressures, personal embarrassment, or
other factors, persuade her to act against her own
professional judgment.
2. Identify and evaluate alternative courses of action
(ethical judgment):
- Legal Issues:
By violating GAAS and ignoring problems, the audit company
may be exposed to legal consequences, especially if the
deficiency turns out to be more serious than originally thought.
- Alternatives/Analysis
Go along with the majority:
o Barbara feels uncomfortable with this decision and knows
she would be violating GAAS by deferring her judgment to
09:34:32 GMT -06:00
