You will work in groups to analyze your assigned cases using the Ethical Decision-Making model. When you’re finished, one group member will post a summary of your cases to the Forum page. Each group member is responsible for providing feedback on one other group’s analysis.
Group A – Case 1 and 2
Group B – Case 2 and 3
Group C – Case 3 and 4
Group D – Case 4 and 5
Group E – Case 5 and 6
Group F – Case 1 and 6
Case Descriptions
Case 1
You have a new client, Buff One Gym Inc., that is very interested in having your firm provide all accounting and tax related services. The owner, has asked if you would perform certain services for a special cash price. He says that he has significant cash inflows that he would like to use to pay off bills. He goes on to say that you don’t have to give him a receipt for the cash work as he doesn’t want to claim it on the company records as an expense. When you express concern about cash deals, he changes the topic.
Case 2
As the new accountant for the Get Gas Here Truck Stop & Restaurant, an employee has told you about a common practice that occurs at the truck stop. Gas bar attendants are frequently asked by truckers to over-bill the gas component of a bill and give the truckers cash in exchange. For example, a trucker who fills up with $200 worth of gas will have the attendant bill $300 on the trucker’s credit card. To make things balance out, the trucker gets $100 cash given to them with the $200 worth of gas. The trucker then bills the trucking company they are working with for $300 for fuel costs.
Case 3
Attracta Lures is a successful publicly traded company. You own 1000 shares in the company and have recently joined Pimon and Tumba CAs, who are the auditors of Attracta Lures. You know that you will be part of the audit team performing the audit of Attracta Lures.
Case 4
Iceberg Cold Storage is a client that will have an initial public offering (IPO) in about three months. This company is performing exceedingly well and has recently signed an agreement with a large fast food company to be its only storage facility in Canada. This information is not in the local newspapers and you have been offered shares in the private company before it goes public because of the long-standing relationship you have with the client. Once the IPO takes place, the shares would be converted into shares of the publicly traded company.
Case 5
You are a newly qualified chartered accountant who has recently moved to a midsize town to start a local practice. Your first client requires an audit. Standard procedure requires that you verify the inventory count at the year-end. However, the year-end was a month ago and no inventory count was performed. This would be your first client and would bring in a fee of $5000.
Case 6
Cynthia VandenBerg operates a consulting firm. She performed work for the local Thunderwood Golf Course, but agreed to a golf membership in lieu of the work performed. An annual membership would cost $1400. Cynthia argues that since no money changed hands, it need not be recorded as revenue. You act as accountant for Cynthia and have been friends for years.
When you’re finished, continue to Part III – Research.