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Ethical Obligations and Decision Making in Accounting Text and Cases Third Edition

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Ethical Obligations and Decision Making in Accounting Text and Cases Third Edition

Steven M. Mintz, DBA, CPA Professor of Accounting California Polytechnic State University, San Luis Obispo

Roselyn E. Morris, Ph.D., CPA Professor of Accounting Texas State University–San Marcos

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ETHICAL OBLIGATIONS AND DECISION MAKING IN ACCOUNTING: TEXT AND CASES, THIRD EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2014 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2011 and 2008. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3

ISBN 978–0–07–786221–3 MHID 0–07–786221–X

Senior Vice President, Products & Markets: Kurt L. Strand Vice President, Content Production & Technology Services: Kimberly Meriwether David Managing Director: Timoth Vertovec Brand Manager: James Heine Marketing Manager: Constantine Karampelas Development Editor: Gail Korosa Director, Content Production: Terri Schiesl Project Manager: Judi David Buyer: Jennifer Pickel Cover Image: Dynamic Graphics/Jupiterimages Compositor: S4Carlisle Publishing Services Typeface: 10/12 Times New Roman Printer: Quad/Graphics

All credits appearing on pages or at the end of the book are considered to be an extension of the copyright page.

Library of Congress Cataloging-in-Publication Data Mintz, Steven M. Ethical obligations and decision making in accounting: text and cases / Steven M. Mintz, DBA, CPA, Professor of Accounting California Polytechnic State University, San Luis Obispo Roselyn E. Morris, PhD, CPA, Professor of Accounting Texas State University-San Marcos. — Third edition. pages cm ISBN 978-0-07-786221-3—ISBN 0-07-786221-X 1. Accountants—Professional ethics—United States— Case studies. I. Morris, Roselyn E. II. Title. HF5616.U5M535 2014 174'.4—dc23

2013011582

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

www.mhhe.com

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“Whatever we learn to do, we learn by doing it.” — Aristotle

We hope this book inspires students to engage in the learning process, to make ethical choices in their lives, and always strive for excellence in whatever they do.

Dedication

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About the Authors STEVEN M. MINTZ, DBA, CPA, is a professor of accounting in the Orfalea College of Business at the California Polytechnic State University–San Luis Obsipo. Dr. Mintz received his DBA from George Washington University. His first book, titled Cases in Accounting Ethics and Professionalism, was also published by McGraw-Hill. Dr. Mintz develops individual courses in professional accounting ethics for Bisk Education that meet each state’s board of accountancy mandatory requirements for continuing education in ethics. He also writes two popular ethics blogs under the names “ethicssage” and “work- placeethicsadvice.” Dr. Mintz has received the Faculty Excellence Award of the California Society of CPAs and Service Award from the California Board of Accountancy for his work on the Advisory Committee on Accounting Ethics Curriculum.

ROSELYN E. MORRIS, PH.D., CPA, is a professor of accounting in the Accounting Department at the McCoy College of Business, Texas State University–San Marcos. Dr. Morris received her Ph.D. in business administration from the University of Houston. She is a past president of the Accounting Education Foundation and a member of the Qualifications Committee of the Texas Board of Public Accountancy. Dr. Morris has received the Outstanding Educator Award from the Texas Society of CPAs.

Both Professors Mintz and Morris have developed and teach an accounting ethics course at their respective universities.

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Preface Why Did We Write This Book?

The first edition of Ethical Obligations and Decision Making in Accounting: Text and Cases was written in the wake of the dot.com bubble and accounting scandals at companies such as Enron and WorldCom. The second edition was written in the wake of the financial meltdown of 2007–2008 that was due to high-risk lending and borrowing practices. The result of these scandals has been an increased call by professional and regulatory bodies for ethics education of accounting students in values, ethics, and attitudes to support pro- fessional and ethical judgments and act in the public interest. We dedicate ourselves to this goal through our book.

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