Essay on ACC 260 Week 9

Submitted By RJSVIXEN
Words: 1527
Pages: 7

Week 9 Final Assignment

ACC/260

Appendix C Stakeholder Impact Analysis Table
Stakeholder
Interest in the Issue
Influence
Urgency
Persuasiveness
Importance
Daniel Potter
Dan feels that his moral and ethical values would be compromised if he does as Oliver has said. Yet he does not want to compromise the goodwill of his employer, or his own deep held personal values.
Low
High
High
High
Oliver Freeman
Oliver is more interested in a clean report for the client and possibly acquiring that client exclusively in the future, than in any possible problems in the overvaluation of one subsidiaries realty holding.
Medium
Medium
Medium
High
Baker Greenleaf
The firm has a responsibility to the upkeep of their excellent reputation and the growth of their company.
High
High
High
High
Client Company

The client company is interested in a clean audit, despite possible concerns brought to light about the incorrect valuation on one smallholding, only worth 1% of their total worth.
Low
Medium
Medium
Medium
Public Interest
The public has the right to expect that public audits done on a company are completely forthright, relevant, unbiased and true.
High
High
High
High

The ethical dilemmas that are associated with this scenario are first Dan’s view that a superior (Oliver) had deviated from Dan’s understanding of what the AICPA code of ethics means, and his ingrained personal beliefs of what the accounting firm should be doing in a public audit. Rather than looking out for the public’s interest, Oliver (his superior) was more concerned with trying to secure the clients account exclusively for the firm and was allowing (encouraging) the audit to continue the companies overvaluation of a specific property held by a subsidiary, by 1.9 million dollars. This would over value assets held by the clients subsidiary company, by that amount, an estimated 7% of that subsidiary’s income statement, 4% more than allowed in the AICPA regulations, but only 1% of the main companies material holdings, which is below the legal limit of 3%. Dan’s other dilemma is his belief in loyalty to his employer and their clients based on his religious beliefs and the words of the bible equating loyalty to the employer to actions “out of fear of god” (Colossians 3:22). These beliefs confuse him as to what the ethical outcome of the situation should be.

The stakeholders involved are; Dan, Oliver, the firm Baker Greenleaf, the client company, and the public relying on an unbiased opinion of the company’s financial health. Dan does not want to compromise his values, and respects his employers’ longstanding good reputation in the field, but does not believe that the clean opinion in the company file should have his name on it.
Oliver believes that Dan is making more of the matter of materiality, than needs to be made, and since it will only be used “in house” that it was not a big deal to issue a “clean opinion”. He also stated that no one reads these reports anyway, and that the material difference did not matter to the consolidated client company as a whole as it was less than 1% of the company’s assets. Oliver’s feelings were because he had more experience than Dan, he should know better as to how to handle the situation. He wants to land a client, and help the firm to prosper.
The firm Baker Greenleaf as a stakeholder will be ultimately responsible and liable for the “clean opinion” and a false audit would not benefit them later if it were proven that the material difference in the estimated value of the property, was knowingly upheld by them. The firm also has to consider their reputation, their employees, and their responsibility to the public, on top of the need to secure client accounts for business growth.
The client company wants a clean audit and has responsibilities to its own stakeholders to grow and be profitable. Knowingly misrepresenting their financial status would not…