Documente Academic
Documente Profesional
Documente Cultură
BY Teddy Dunggio
A: Todd must persuade his wife (Carried) to think it over by telling or reporting
the cash sales of that day to the accountant (Harold Heywood), because there
would be a great deal of risks if she didn’t report that. Besides, Todd already told
her the rules of tax sales/income tax, and even though Carrie was being asked (by
Mrs. Cook) wasn’t a good practice, it’s kind of fraud (hiding sales fraud, by not
reporting the cash sales, it would reduce income, then the tax of that income
would be lower than it was supposed to be).
A: Todd had the obligation as an up-coming CPA to tell the truth and applied
what he already learnt in the accounting school (because he already knew the
rules of good practice of accounting, it was proven by being already passed the
examination of becoming CPA. Even though he must wait until he got enough
experiences to earn his CPA). Especially what he already learnt in accounting
school are ethic codes of being CPA, some of them are Integrity and objectivity/
conflict of interests (not having certain interest because of special relationship
with that PIC).
A: As a husband, Todd must love and protect Carrie (as the wife) from any harm
and also support her career. But in this case, in term of protecting Carrie from
any harm, then Todd must warn Carrie about hiding some sales and hiding tax
income could be considered as the attempt of breaking the law, there will be a
greater risk i.e: going to jail (even though Carrie is just a staff, she could be
considered as the accomplice of Mrs. Cook in income tax fraud/sales fraud)
A: It doesn’t make any difference if Todd isn’t a CPA yet. The reason he isn’t a
CPA yet is that he must wait until he gets enough experience to earn his CPA. He
already passed the CPA exam and he already went to the accounting school. It
means that he already knows the rules and he knows what are the good practices
in accounting. He must have learned the principles and ethic codes of becoming a
CPA, then he must apply what he learns when he faces issues with accounting
problem.
A: If he couldn’t persuade his wife to tell the truth and not to get involved in
income tax/sales fraud, yes, Todd could ask some advice from a principal in his
firm. Maybe that principal had a better solution.
A: Yes, he could discuss the matter with Harold Heywood (the accountant), but
Todd mustn’t tell the subject of that matter (which was Mrs. Cook). He must
pretend that the matter came from another shop (must keep some information just
to himself)
A: Even though he knows that Heywood is a close friend of Mr. Cook, he still can
discuss the matter, but as long as he keeps certain kind of the information to
himself (such as: the subject : Mrs. Cook, the shop name, and the informant), just
pretend that the matter comes from other shop and from other person.
7. Q: In considering broader ethical issues, who is harmed by Mrs. Cook’s current
practice, if it is being used to avoid the recognition of income?
A: The one who is being harmed is Carrie, because if Carrie helps that kind of
practice, she can be considered as the accomplice of Mrs. Cook.
Mr. Heywood can be harmed too, because what he calculates as an accountant so
far is wrong. He will have bad image either because of this.
8. Q: What are the personal and professional benefits or the consequences if Todd
takes action on his knowledge?
A: If Todd takes action on his knowledge then Carrie will get out of the hook as
becoming the accomplice of Mrs. Cook, because he can testify that Carrie didn’t
know what she did was wrong, so Todd has the obligation to tell the truth and
rules to Carrie and ask his wife not to break the law.
The consequences are:
a). Carrie (his wife) will get upset because her dream to buy into the business (as
partner) will disappear,
b). Carrie will lose her job, so Todd’s household will only has one source of
income which is from Todd only.
9. Q: What should Todd do about his information if the CPA firm for which he
works is hired to do Mrs. Cook tax work?
A: Todd must make the tax calculation based on the real income and sales.
10. Q: What should Todd do about his information if the CPA firm for which he
works is hired to audit Mrs. Cook?
A: Todd must report his findings to the firm and also to Mrs. Cook, and make
recommendation what is the best practice and make the tax calculation based on
the real income. Also show what kind of rules that Mrs. Cook already breaks if
she keeps doing what she does and also tells her the consequences either.