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September 21, 2014

Homework Help: Accounting

Posted by shelli on Tuesday, April 7, 2009 at 2:37pm.

Accounting 260 Locker Room talk Ethics Stakeholder Impact Analysis.

Analyze the case using stakeholder impact analysis and the philosophical approaches to ethical decision making.

What should Albert do?

Albert Gable is a partner in a CPA firm located in a
small midwestern city which has a population of
approximately 65,000. Mr. Gable’s practice is primarily
in the area of personal financial planning; however,
he also performs an annual audit on the city’s
largest bank.
Recently, Mr. Gable was engaged by Larry and
Susan Wilson to prepare a comprehensive personal
financial plan. While preparing the plan, Mr. Gable
became personal friends of the Wilsons. They confided
to him that they have had a somewhat rocky
marriage and, on several occasions, seriously discussed
divorce. Preparation of the comprehensive
personal financial plan, which is nearing completion,
has taken six months. During this period, Mr. Gable
also performed the annual audit for the bank.
The audit test sample selected at random from the
bank’s loan file included the personal loan files of Larry
and Susan Wilson. Because certain information in the
loan files did not agree with facts personally known to
Mr. Gable, he became somewhat concerned. Although
he did not disclose his client relationship with the
Wilsons, he did discuss their loan in detail with a loan
officer. The loan officer is very familiar with the situation
because he and Larry Wilson were college classmates,
and now they play golf together weekly.
The loan officer mentioned to Mr. Gable that he
believed Larry Wilson was “setting his wife up for a
divorce.” In other words, he was arranging his business
affairs over a period of time so that he would be
able to “leave his wife penniless.” The loan officer
indicated that this was just “locker room talk” and
that Mr. Gable should keep it confidential.
Mr. Gable’s compensation from his firm is based
upon annual billings for services. If Mr. Gable
resigns as CPA for the Wilsons, it would result in his
losing a bonus constituting a substantial amount in
annual personal compensation. Mr. Gable is counting
on the bonus to contribute to support tuition and
expenses for his youngest daughter, who will be
starting as a freshman in college next fall.

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