BUSINESS LAW, ETHICS AND SOCIAL RESPONSIBILITY

Discussion Assignment

For this assignment write at least 400 words answering the following.

Oversimplifying the case of Enron and Arthur Andersen, Enron was using some accounting practices that were questionable. Because Arthur Andersen was an independent auditor, they were responsible for reporting any questionable accounting practices might be risky to the shareholders of Enron. The Security and Exchange Commission was responsible for requiring and publishing accurate information about Enron's accounting information. In the end, a few Enron employees went to jail, and Arthur Andersen stopped doing business under that name. 

• Identify what you      consider any conflicts of interest in the case of Enron and Arthur      Andersen.


• What could have been      done to avoid the conflicts of interest you identified?


• How would you change the      laws to correct the problems that came up in the Enron and Arthur Andersen      case? 


• Explore how Enron and      Arthur Andersen might have been encouraged to act ethically other than      direct legal pressures. 


• To what extent (if any)      should sustainability concerns and issues be incorporated in accounting      analyses?


• When (if ever) should      organizational decisions with sustainability-related impacts and      significant associated cost-implications (savings or expenditures) be      shared with shareholders?

Discussion Responses

It is your responsibility to respond to three classmates by providing comments, asking questions, or having a conversation about their main post. Feedback should be appropriate, meaningful, and helpful. For instance refer to how your own experience supports/contradicts the opinions developed by your peers. If you think they are too general or not rooted enough in personal experience, you may also ask for more detailed examples supporting these opinions. In particular make sure that the examples provided are properly referenced and that you are able to access them. Overall, your comments should contribute positively to the conversation by broadening or clarifying it. Feedback should be at least 3-4 complete sentences. You should also respond to anyone who has responded to you. 

Written Assignment

Use the Instructions for Case Analyses to craft a response to this case, articulating the main issues and ethical dilemma.   Review the assessment criteria below before you begin writing. 

Case Study: Conflicting Clients

Topic: Auditing (Confidentiality, Misrepresentation of Facts)

People Involved:

• Jennifer Grace, First      year member of her CPA firm’s management group


• Tom Ward, CFO of      Fantastic Developments, Inc., a client

While reviewing the current-year audit working papers of Coshocton National Bank (CNB), the engagement manager, Jennifer Grace, noted something curious. In the working papers related to loan valuation, Jennifer saw that the commercial loan of Fantastic Developments had been randomly selected for confirmation but that Fantastic had not responded to either the initial or second confirmation request. The audit staff disposed of this “loose end” by alternate procedures: examining cash collections (which had become somewhat sporadic) and vouching to underlying loan documentation, including a set of recent (unaudited) financial statements that showed Fantastic’s solid financial position and operating profitability.

Jennifer noted this reference to Fantastic Developments because this private company was also a client of her firm. In fact, Jennifer had served as the audit senior on Jennifer noted this reference to Fantastic Developments because this private company was also a client of her firm. In fact, Jennifer had served as the audit senior on the prior-year audit of Fantastic. She knew that the company had been struggling for a couple of years and had experienced recurring operating losses. Her knowledge of Fantastic did not reconcile with the discussion in the audit working papers related to the financial statements furnished to the bank.

When Jennifer contacted Fantastic’s CFO, Tom Ward, and inquired about the company’s apparently miraculous turnaround, he was noncommittal and unhelpful. Tom replied that business had picked up. He apologized for not calling Jennifer’s firm himself because he had been so busy, and then he told her that Fantastic had decided to engage another CPA firm for its accounting and auditing needs. Although confused, Jennifer obviously couldn’t reject the possibility that this abrupt dismissal was a direct consequence of her inquiry.

As a result, Jennifer wonders whether the financial statements which Fantastic furnished to the bank as a basis for a loan application are fraudulent. The bank apparently has no such suspicion, however.

Written Assignment Requirements

Submit a written paper which is 2-3 pages in length exclusive of reference page and that is double-spaced. The paper should cite sources to support your ideas. Be sure to review the assessment criteria below before beginning your paper. Cite any reference(s) you use in the preparation of your essay using proper APA format.

Written Assignment Peer Assessment Rubric

For this assignment, your peers will be evaluating your work with the following criteria. 

• Identifies all the      relevant facts of the case.


• Articulates overarching      ethical issues including the extent of Jennifer's responsibility to take      action; how the interests of the firm (and stockholders) can be balanced      against the environmental interests; what obligation the company has to      future generations and citizens.


• Identifies all      stakeholders.


• poses possible alternatives      and ethics of each alternative.  Paper should explore the possible      alternatives and ethics from the Utilitarian Perspective, the Rights      Perspective, or the Justice Perspective


• identifies all practical      constraints


• recommends a specific      action Jennifer should take 


• is of high quality,      writing is clear and professional


• conforms to the      structural requirements including APA style guidelines for References.