Axia College of University of Phoenix
ACC/260
Dan works for a large firm, Baker Greenleaf, and he has been very in tune with the ethics in his profession. Dan was chosen to be part of a special audit team and the project senior placed Dan with a real estate subsidiary to audit. Dan’s job on this audit was to come out with a “clean opinion” of the Sub by the end of the month. When Dan finished with his files and submitted them to Oliver Freeman, the project senior, for review he found a few mistakes. The one mistake that was found that started Dan’s ethical dilemma was that the Sub’s biggest real estate property showed on the balance sheet to have value of $2 million. Dan estimated this property to be worth no more than $100,000. Dan spoke to the Sub’s managers about writing down the property by $1.9 million, but they saw renting potential and refused. Since the write down would have a seven percent impact on the Sub’s net income Dan decided to submit a recommendation for “subject to opinion”. When Oliver saw this he wanted Dan to change his “subject to opinion” to a “clean opinion”. Dan held his ground stating that the write down was definitely a material difference. With Dan’s words and files in mind when Oliver turned the audit in he took out Dan’s analysis and also gave Dan a negative evaluation on the audit.
Dan, Oliver, and Baker Greenleaf could all be held responsible if there cam a time when potential buyers wanted to purchase this property. If the buyer were to discover that this property only had a value of $100,000, but they paid $2 million for it, they may sue for their losses. If this were to take place Dan, Oliver, and Baker Greenleaf would be held accountable. The Sub’s managers could also be held liable for this because they would also have the knowledge that this property was not worth as much as what the files stated. There may also be potential buyers who would be affected by this. They would not know the real value and they could be...