BUS 5115 Unit 2 Written Assignment Guide (100% correct)
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Course
BUS 5115 Business Law
Institution
BUS 5115 Business Law
A guide to assignment on a case study that deals with conflicting clients. Jennifer the manager at CPA audited the Coshocton National Bank (CNB) and the ethical dilemma that rises from that. A total of 4 pages including possible alternatives, recommendations, and references.
MBA Business Administration
University of the People
BUS 5115-Business Law, Ethics, and Social Responsibility
Case Study: Conflicting Clients
The Relevant facts
Jennifer, the engagement manager at a CPA firm's management group audited the current-year
audit working papers of Coshocton National Bank (CNB). The bank was in the process of
providing a commercial loan for Fantastic Development (FD). However, Jennifer has discovered
inconsistencies in the financial statements that started her suspicion. She has audited this firm in
the past and found that FD is struggling financially for a few years and has experienced a
recurring operational loss.
This knowledge doesn't fit with the unaudited financial statements that the bank claims to
support Fantastic's strong financial position. Consequently, she tried to inquire additional
information from Tom Ward, CFO of Fantastic Developments, Inc. however he was not
cooperative. Furthermore, he had notified her that he has decided to change accounting firms and
Jennifer believed her investigation may play a part in his decision.
Ethical Issues
Various ethical issues can be pointed out in this case study. First, Jennifer used her previous
knowledge that she gained by auditing Fantastic to check the validity or consistency of the
current-year audit working paper. In this case, the issue of professional secrecy to her former
client Fantastic Development, and her duties to the bank is a conflicting issue.
Second, she is an independent auditor of CNB which requires her to reveal any finding she has
that may be a cause for suspicion. The lack of information or the conflicting nature of the
financial information should be presented without making any ethical compromise. However,
these would be presenting an incomplete report and it might affect her final decision.
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