Instructions: Analyze the situation below using the 6-stepapproach to resolving ethical dilemmas on the next page. You shoulddiscuss each step of the approach in a separate paragraph.Therefore your finished paper should be 6 paragraphs long andapproximately 2-3 pages typed in 12-point font and double spaced.Prepare the paper in Word format and submit in the dropbox set upin Western Online by the due date listed there. This assignment isworth 60 pts in total with 50% of points for content and adherenceto the 6-step approach and 50% on grammatical style andpresentation (writing skills).
Jon Williams, CPA, is in the middle of the real-life soap opera,âTaxing Days of Our Livesâ
The Cast of Characters:
Oneway Corporation is Jonâs audit and tax client. The threedirectors are the officers and the only three stockholders, eachowning exactly one-third of the shares
President Jack founded the company and is now nearingretirement. As an individual, he is also Jonâs tax client.
Vice President Jill manages the day-to-day operations. She hasbeen instrumental in increasing the business and its profits.Jillâs individual tax work is done by CPA Phil.
Treasurer Bill has been a long-term, loyal employee and has beenresponsible for many innovative financial transactions and reportsof great benefit to the business. He is Jonâs close personal friendand an individual tax client. (Side Note: Another CPA in Jonâsaudit firm is the partner assigned to the audit engagement ofOneway Corporation to maintain auditor independence for thisengagement.)
The Request
President Jack discussed with CPA Jon the tax consequences tohim as an individual of selling his one-third interest in OnewayCorporation to Vice President Jill. Later, meeting with Bill todiscuss his individual tax problems, Jon learns that Bill fearsthat Jack and Jill will make a deal, put him in a minorityposition, and force him out of the company. Bill says, âJon, wehave been friends a long time. Please keep me informed about Jackâsplans, even rumors. My interest in Oneway Corporation represents mylife savings and my resources for my kidâs college. Remember,youâre little Ottoâs godfather.â
Thinking back, Jon realized that Vice President Jill has alwaysbeen rather hostile. Chances are that Phil would get the Onewayengagement if Jill acquires Jackâs shares and controls thecorporation. Nevertheless, Bill will probably suffer a great dealif he cannot learn about Jackâs plans, and Jonâs unwillingness tokeep him informed will probably ruin their close friendship. Jonponders the problem. âOneway Corporation is my client, but acorporation is only a âlegal entityâ. The stockholders personifythe real entity, so they are collectively my clients, and I cantransmit information among them as though they were one person.Right? On the other hand, Jack and Bill engage me for individualtax work, and information about oneâs personal affairs is really nobusiness of the other. âWhat to do? What to do?â
Ethical Model 1. Obtain the relevant facts.
2. Identify the ethical issues from the facts.
3. Determine who is affected by the outcome of the dilemma andhow each person or group is affected.
4. Identify the alternatives available to the person who mustresolve the dilemma.
5. Identify the likely consequence of each alternative.
6. Decide the appropriate action.
Instructions: Analyze the situation below using the 6-stepapproach to resolving ethical dilemmas on the next page. You shoulddiscuss each step of the approach in a separate paragraph.Therefore your finished paper should be 6 paragraphs long andapproximately 2-3 pages typed in 12-point font and double spaced.Prepare the paper in Word format and submit in the dropbox set upin Western Online by the due date listed there. This assignment isworth 60 pts in total with 50% of points for content and adherenceto the 6-step approach and 50% on grammatical style andpresentation (writing skills).
Jon Williams, CPA, is in the middle of the real-life soap opera,âTaxing Days of Our Livesâ
The Cast of Characters:
Oneway Corporation is Jonâs audit and tax client. The threedirectors are the officers and the only three stockholders, eachowning exactly one-third of the shares
President Jack founded the company and is now nearingretirement. As an individual, he is also Jonâs tax client.
Vice President Jill manages the day-to-day operations. She hasbeen instrumental in increasing the business and its profits.Jillâs individual tax work is done by CPA Phil.
Treasurer Bill has been a long-term, loyal employee and has beenresponsible for many innovative financial transactions and reportsof great benefit to the business. He is Jonâs close personal friendand an individual tax client. (Side Note: Another CPA in Jonâsaudit firm is the partner assigned to the audit engagement ofOneway Corporation to maintain auditor independence for thisengagement.)
The Request
President Jack discussed with CPA Jon the tax consequences tohim as an individual of selling his one-third interest in OnewayCorporation to Vice President Jill. Later, meeting with Bill todiscuss his individual tax problems, Jon learns that Bill fearsthat Jack and Jill will make a deal, put him in a minorityposition, and force him out of the company. Bill says, âJon, wehave been friends a long time. Please keep me informed about Jackâsplans, even rumors. My interest in Oneway Corporation represents mylife savings and my resources for my kidâs college. Remember,youâre little Ottoâs godfather.â
Thinking back, Jon realized that Vice President Jill has alwaysbeen rather hostile. Chances are that Phil would get the Onewayengagement if Jill acquires Jackâs shares and controls thecorporation. Nevertheless, Bill will probably suffer a great dealif he cannot learn about Jackâs plans, and Jonâs unwillingness tokeep him informed will probably ruin their close friendship. Jonponders the problem. âOneway Corporation is my client, but acorporation is only a âlegal entityâ. The stockholders personifythe real entity, so they are collectively my clients, and I cantransmit information among them as though they were one person.Right? On the other hand, Jack and Bill engage me for individualtax work, and information about oneâs personal affairs is really nobusiness of the other. âWhat to do? What to do?â
Ethical Model 1. Obtain the relevant facts.
2. Identify the ethical issues from the facts.
3. Determine who is affected by the outcome of the dilemma andhow each person or group is affected.
4. Identify the alternatives available to the person who mustresolve the dilemma.
5. Identify the likely consequence of each alternative.
6. Decide the appropriate action.
