Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 13

With respect to the Armadillo Foods case in this chapter, let’s assume that the controller is being by told by top management that to “make the numbers” the company must increase EPS by $.02 per share. This sounds innocent enough and it is only a four percent increase. Does the relative size of the increase make any difference in deciding whether to increase EPS by $.02? Would you go along with top management’s demand? What ethical issues should you consider in deciding on a course of action?

Step 1 of 2

Ethics:

Ethics in the accounting profession is defined as guidelines and principles. It includes laws and standards of behavior.

AICPA

AICPA stands for the American Institute of Certified Public Accountants. It is founded in 1887. AICPA is set up in the United States and it is the national professional organization of Certified Public Accountant.

Role of AICPA

1. It set a standard of ethics for the best practice for accounting.

2. Create guidelines with the new legislation.

3. In relation to accepted accounting practice (CPA) its monitors service quality.

AICPA is designed to resolve the issue related to the audit and preparation of an audit report by the CPA. The AICPA’s provide a higher professional manner benefits to the public, employers, and clients. There are more than 40,000 members in 128 countries in AICPA including government, industries, and international associates.