ACC618 Case Study United Thermostatic Controls

Name

ACC618: Professional Ethics for the Accountant (FSJ2302A)

Traci West

29th January, 2023

Case Study: United Thermostatic Controls

A stakeholder is a party with a vested interest in the outcome of a situation. And who will be responsible for the potential consequences of any failure that may occur (Klein, 2019). This is a fundamental and essential component of any successful business. Tony Cupertino and the other executives in the corporation are the ones who have a vested interest. Tony Cupertino is morally and ethically liable for the accuracy of the financial reports issued by United Thermostatic Controls. In order to give the most up­to­date and correct financial information, external auditors have a significant impact on and influence on internal accountants, records, finances, and auditors. Others who have a vested interest include Finance and Accounting Director Frank Campbell and the division directors and their staff.

Tony Cupertino is responsible for United Thermostatic Controls’ accounting and financial reporting. Cupertino is liable for enforcing and complying to all rules, norms, and regulations set out by the CPA and the CIA, and for maintaining a high degree of integrity by ensuring that all internal controls are followed. As a certified public accountant, Tony Cupertino is obligated to act with objectivity and honesty in accordance with all AICPA rules and guidelines and generally accepted accounting principles (Benson, 2018). In my capacity as a member of the Central Intelligence Agency Confidentiality, neutrality, honesty, and competence are all standards that Tony Cupertino must observe.

At United Thermostatic Controls, it is Tony Cupertino’s duty to report any instances of questionable income to Walter Hayward, the company’s CFO. According to Section 302 of SOX, it is Walter Hayward’s responsibility to guarantee and attest that all financial records are accurate and complete (Sonnerfeldt, 2018). Additionally, as a member of the board of directors, Walter has a fiduciary obligation to protect the company’s assets and make any and all choices that are in the best interests of the company’s shareholders (Mintz and Morris, 2014). Tony Cupertino needs to keep his head down and make sure everything is in order on his end since he has to alert the company’s audit team and board of directors if he can’t provide Walter, the CFO, a satisfactory explanation that satisfies the GAAP. If the issue can’t be resolved internally, he has to inform an outside party. Accountants, auditors, the chief financial officer, and the chief executive officer are all accountable for protecting the integrity of the company’s financial records and ensuring that all financial reports are correct.

Since it is unclear who made the decision to give Tony Cupertino authority over pricing and discounting while he is merely the CIA, I find this idea to be immoral. A policy like this should not be adopted by the company, and from a financial standpoint, the period looks fantastic because sales will drop dramatically until the books are corrected. Cupertino broke his contract with Balco by communicating with the company’s chief financial officer. Cupertino compromised his honesty, ability, and impartiality. He must follow company protocol before making any major decisions. When Tony Cupertino decided to join in on the action, he betrayed the company’s confidence. Before making an offer, Tony Cupertino should follow business protocol. Tony

Cupertino, in my opinion, betrayed the company’s confidence by engaging in these activities.

References

Benson, S. S., Thomas, P. B., & Burton, E. J. (2018). The CPA’s role in forming benefit corporations. Journal of Accountancy, 226(1), 84–90. Retrieved from http://search.ebscohost.com.proxylibrary.ashford.edu/login.aspx?direct=true&db=bsh&A

N=130449877&site=eds­live&scope=site  

Klein, P. G., Mahoney, J. T., McGahan, A. M., & Pitelis, C. N. (2019). Organizational Governance

Adaptation: Who Is In, Who Is Out, and Who Gets What. Academy of Management

Review, 44(1), 6–27. https://doi­org.proxy­library.ashford.edu/10.5465/amr.2014.0459

Mintz, S. M., & Morris, R. E. (2014). Ethical obligations and decision making in accounting: Text and cases (3rd ed.). Retrieved from https://www.vitalsource.com

Sonnerfeldt, A., & Loft, A. (2018). The changing face of ethics – Developing a Code of Ethics for Professional Accountants from 1977 to 2006. Accounting History, 23(4), 521–540. https://doi­org.proxy­library.ashford.edu/10.1177/1032373217751219