Case 5.2 Aig

1. Is it estimable for a certified public accountant or certified public accountant immobile to foster companies like their reported earnings and financial considerateness? First gull that the certified public accountant or certified public accountant hard is portion as a adviser, and then assume that the certified public accountant or certified public accountant unwavering is serving as the disposed(p) entitys independent tender. Defend your answers. In my opinion, it is not ethical for a CPA or CPA squiffy to help companies take their reported earnings and financial condition. The framework of estimable cerebrate comprises five parts: Opinion, self- stakes, consequence, duty, and character. This framework can help us better analyze this matter. First, opinion puts self-interest p benthesis to chitchat into this matter. If a CPA or CPA tight offset serves as a consultant then as the give entitys auditor, it is auditing its own work. In that way, nobody el se is really departure to check whether a certain accounting intercession is submissive with GAAP. Different opinion resulted from different understanding more or less an issue would not be raised. Moreover, generally speaking, homo beings are reluctantly to admit their mistakes. The CPA or CPA firm would at least have reputational interest in the financial report that it managed. This human nature exit bungle the CPA or CPA firms independence, and will minify the reliability of the audit report.

Second, self-interest focuses on the interest of ending makers. The CPA or the individual partner of the CPA firm would probably incre ase his own compensation by serving as both ! the entitys consultant and auditor. On the otherwise side, for the entity, hiring the same firm as both consultant and auditor can save it audit expense, since the CPA or CPA firm has already known a kitty well-nigh it when realizeing consulting, thus decreasing its audit hours. For example, in the case, later on receiving the copy of SAS No.50 report, E&Y did not perpetrate any meaningful separate analysis in ending making that the SPE accounting treatment of PNC was acceptable. Third, consequences focus on the interest...If you postulate to father a full essay, order it on our website: BestEssayCheap.com

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