Synopsis of the Case: The content of the synopsis should present relevant backgr
ID: 463501 • Letter: S
Question
Synopsis of the Case: The content of the synopsis should present relevant background facts about the case under examination.
Relevant Factual Information about the Problem or Decision the Organization Faced: State the precise problem or decision the organization faced. The section should include information that addressed the business issue under examination. This section should be no longer than a single paragraph.
Explanation of Relevant Concepts, Theories and Applications Derived from Course Materials: This section should be the bulk of your paper. Analysis of the business problem or decision in light of the course concepts must be presented, as well as the business lesson another organization could learn from this situation. Besides citation to the text, learners must conduct research in the University library related to the top. Citing the textbook only is not enough to demonstrate you understand and can apply the course objectives. Here is where comparative and contrasting positions should be considered and examples and illustrations provided.
Recommendations: Provide logical recommendations to address the business lesson identified above. The recommendations need not to be specific to the organization examined, but should consider how other organizations, if similarly situated, could lessen the impact of the problem or decision identified. Recall, that the organization under examination has already moved pasted this problem so any recommendations made, at this point, are fruitless. The focus of this section should be on what other companies should be aware of to address similar problems or decisions. Citation to the textbook alone is insufficient for analysis in this section. Learners should conduct research in the University’s library to support their positions. Depth of scholarship is not demonstrated by providing personal opinions alone, but by using examples, analogies, comparison and illustrations from the academic literature. Not only does this synthesize the material to assist the reader’s understanding, it is an effective way to present the academic sources and extend the discussion of your ideas. This section should be a paragraph or two.
Alternative Recommendations: This section is not a continuation of the prior. Provide suggestions for how to avoid the problem or decision the examined organization faced. Analysis here should be may be forward- thinking, predictive or, most likely, preventative in nature but tied to the thesis statement. Again, opinion is insufficient to provide the required academic analysis. Sources, other than the text, must be provided to sustain the statements made. This section should be a paragraph, at most.
Conclusion: End the assignment with a summary of the important points made in the document. No new information may be presented. Writing a conclusion can be done by rewording the opening or reformulation the topic sentences of each paragraph to make a summary for the reader. This section should be a paragraph, at most.
Game well d Gantt George a Johnson and johns a Kilpatrick Sue was puzzle LED AS TO WHAT COURSE Of ACTION TO TAKE SHE HAD RECENTLY STARTED Her job with a national cpa she already confronted with a pci Wend that the firm On an audit, she counted a client who had I n treating pay minx to a large number, but by no Renan a majority, of its worker I at pay meant to independent contractor. This practice saves the client the payroll taxes I that would other is he due on the payments it the workers were classified as employees. I n Sue s judgment, this was improper as well as illegal and should have been noted in I t audit. She raised the issue with John, the senior accountant to whom she reported I He thought it was a possible problem but did not seem willing to do anything about it. I He encouraged her to talk, to the partner in charge if she didn't feel satisfied. She thought about the problem for a considerable time before approaching the partner I in charge The on-going professional education classes she had received from her employer cm- I phase/end the ethical responsibilities that she had as a CPA and the fact that her firm endorsed I adherence to high ethical standards This finally sawed her to pursue the issue with the partner I in charge of the audit. The visit was most unsatisfactory. Paul, the partner, spiritually confirmed I her initial reaction that the practice was wrong, but he said that many other companies in the in- I duster> follow such a practice He went on to say that if an issue was made of it. Sue would lose I the account, and he was not about to take such action. She came away from the meeting with I the distinct feeling that hail she chosen to pursue the issue, she would have created an enemy. Sue still fell disturbed and decided to discuss the problem with some of her co-workers. I She approached Bill and Mike, both of whom had been working for the firm for a couple of I years. They were familiar with the problem because they had encountered the same issue I when doing the audit the previous year They expressed considerable concern that if she went over the head of the partner in charge of the audit, they could be in big trouble since they had I failed to question the practice during the previous audit. They said that they realized it was I probably wrong, but they went ahead because it had been ignored in previous years, and they knew their supervisor wanted them to ignore it again this year. They didn't want to cause I problems. They encouraged Sue to be a leant play er" and drop the issue.Explanation / Answer
Synopsis:
This case reflects the trade-off between profit through account management and true ethical practice endorsed by the corporate governance. In this case, a new CPA Sue finds wrong approach adopted by the client firm to save taxes that is inappropriate and she reports to her seniors and discusses it with coworkers also. Though, some of them agree, but no one wants to pursue the issue and ignore. Even, Sue is also suggested the same.
Factual Information about the problem:
Sue, a new CPA is examining the account of a client firm. She finds that payments made to their employees are shown as payment made to contractors. It saves payroll taxes that is not ethical or correct. She conveys it to her immediate boss, but she does not get any solutions. Her co-workers also ignore such issues as it has happened in the past. Now, Sue is confused regarding her further course of action because she knows that what is correct.
Explanation:
Audit process involves examination of the accounting and related details of the firm to establish the material facts as reflected in the documents. Accordingly, the due diligence certificate is issued. As per these guidelines, inappropriate approach to save tax is considered a wrong and unethical behavior and it must be noted by the CPA and then corrected by the company.
Though, it can lead to the loss of the account and CPA firm can lose business. This is what happened in this case. But, CPA firm is not focused on bigger picture. In a situation, such companies caught by the government agencies can lead to the closure of the concerned CPA firm also.
Recommendations:
Sue should stick to her learnings and discuss the issue with the head of the partners. She should also focus upon the guidelines of audit process that is used by the company. She should come up with solutions that is set of ethical principles and corporate governance. It will help firm to get bigger clients even if they lose smaller accounts. But, they can brand themselves to be the CPA firm who doesn’t compromise on Quality of Audit.
Alternative Recommendations:
She can intimate the client company and as per their provided information, she can act within the guidelines of the auditing process.
Conclusion:
The auditing process is very important. Any audited company, caught for any wrong doing also involve their auditors. Thus, ignoring grave issues as presented in the case is not a long term solution. CPA firm should communicate the problem, its possible consequences and remedial action plan to the client company. Time should also be given to the company to clean their house so that future penalties could be avoided.
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