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Essay / Case Analysis: The Unscrupulous Associate: Ethics Case
In the ethics case “The Unscrupulous Associate,” Andrea Fuller is a tax associate at a local licensed accounting firm located in southern California. Ed McDouglass is a general partner of Skyline Views, a limited liability company that builds, operates and sells condominiums. For dedicating 100% of his time to the LLC and taking care of every situation, Ed is the Managing Director of Skyline Views; therefore, he is entitled to a management fee comprising two percent of expenses and a ten percent share of the net income for the year if it exceeds $100,000. As a result, Ed hired Andrea to file Skyline Views' tax return. While Andrea was collecting data for Skyline Views' tax return, she discovered that in addition, by deciding not to inform the sponsors of Ed's deception, Andrea would be disregarding the company's code of professional conduct. the American Institute of Certified Public Accountants by being unreliable, dishonest and deceptive. Andrea has a responsibility to protect her client, which includes encouraging the correction of financial statements to avoid suspicion during audits that could lead to fines and imprisonment. Andrea's second option is to inform the limited partners of how the misrepresentations on Skyline Views' financial statements are allowing Ed to claim higher management fees; this decision will fulfill his duty of due diligence to sponsors while maintaining his integrity as a certified public accountant by supporting the American Institute of Certified Public Accountants Code of Professional Conduct. After informing the sponsors, it would not be his responsibility since the sponsors would choose the necessary course of action against