Discussion 8This Last Fact Mission College Accoun
Discussion 6
Distinguish between common-law liability and statutory liability for auditors. What is the basis for the difference in liability, and what are the key practical differences between the two, such as burdens of proof, consequences or penalties, intent, etc.?
Your discussion assignment must include a separate comment on another student’s initial discussion. Your initial discussion is limited to no more than 300 words (maximum, not required). Your response to another student’s answer is limited to 150 words. Points will be deducted for not responding to another student’s post, or for exceeding the word limit.
Discussion 7
Define materiality as it is used in Chapter 7. How does materiality come into play when assessing financial statement restatements? Other than materiality, what is the one word that might be the most distinguishing factor between ethical earnings management and unethical earnings management?
Your discussion assignment must include a separate comment on another student’s initial discussion. Your initial discussion is limited to no more than 300 words (maximum, not required). Your response to another student’s answer is limited to 150 words. Points will be deducted for not responding to another student’s post, or for exceeding the word limit.
Discussion 8
This last fact pattern is identical to the first. Unlike Module One, however, your grade score will reflect what you have learned from the textbook and my comments.
COMMENT: Although the ‘utilitarianism’ reasoning method may not be the best approach to make an ethical decision for a CPA. Apply the rules (deontology).
The first step is consulting and applying the AICPA. Rules, however, are sterile, perhaps useless, without the application of principles in both their making and implementation. And since personal principles are as varied as the number of accountants, principles must be translated into some manner of uniform guidance for the sake of society and the public interests. Society (including the accounting profession) requires order, and rules and the AICPA gives the order to principles.
The primary takeaway from this discussion and perhaps the course itself is this: Always apply rules in a principled way, and always apply your principles in harmony with the rules. Either way, an accountant must know the profession’s ethics rules, such as the AICPA. To avoid losing your reputation, your job, or worse, refrain from submitting (i) unprincipled work with the rationalization, “I followed the rules,” or (ii) work that breaks the rules with the rationalization, “I followed my personal principles.” The thought process of dealing with an ethical dilemma is as simple (and as complicated) as aligning the profession’s rules with your principles.
FACTS: This week your immediate supervisor assigned you as the senior in charge of an audit of an important international client in New York City because of your excellent work, and because she learned how well you performed in your Foothill Accounting Ethics course. She also made it clear that if he (the client) is not happy with you, your firm could lose the client or you could be demoted. While in New York, the client offers you box seats to a Broadway play you and your spouse (who is in town with you) have wanted to see for years, but tickets must be bought many months in advance. Further, in preparation to interact with the client, you researched the culture of his country and discovered that refusing a gift is considered an insult.
DISCUSSION: After deciding whether to accept the tickets, your supervisor has asked you to write a brief memorandum that summarizes the steps you took in making your decision. She wants a brief explanation of your thought process from both a broadly philosophical point of view, and one that is narrowly tailored to the accounting profession. What would you write as your concise explanation (given our word limit)?