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Fraud in Financial Statements and Auditor Responsibilities 246 Ethics Reflection 246 Fraud in Financial Statements and the Audit Function 247 Nature and Causes of Misstatements 249 Errors, Fraud, and Illegal Acts 249 Reporting an Illegal Act 251 Auditors’ Responsibilities for Fraud Prevention, Detection, and Reporting 252 The Fraud Triangle 252 Incentives/Pressures to Commit Fraud 253 […]

Bernie Madoff’s Ponzi Scheme 128 Whistleblowing 131 Detection, Reporting, and Retaliation 131 Incentivizing Whistleblowing under Dodd-Frank 134 Accountants’ Obligations for Whistleblowing 134 Has the Whistleblowing Program Been Successful? 135 The Ethics of Whistleblowing 136 Concluding Thoughts 137 Discussion Questions 137 Endnotes 140 Chapter 3 Cases 149 Case 3-1: The Parable of the Sadhu 150 Case

Code of Professional Conduct 175 Ethics Reflection 175 The Public Interest in Accounting: An International Perspective 177 Investigations of the Profession: Where Were the Auditors? 178 Metcalf Committee and Cohen Commission: 1977–1978 179 House Subcommittee on Oversight and Investigations: 1986 180 Savings and Loan Industry Failures: Late 1980s–Early 1990s 181 Treadway Commission Report: 1985; COSO:

Ethical Reasoning: Implications for Accounting 1 Ethics Reflection 1 Integrity: The Basis of Accounting 3 Religious and Philosophical Foundations of Ethics 4 What Is Ethics? 5 Norms, Values, and the Law 6 Ethical Relativism 8 Situation Ethics 8 Cultural Values 10 The Six Pillars of Character 11 Trustworthiness 12 Respect 15 Responsibility 15 Fairness 15

Earnings Management and the Quality of Financial Reporting Case Descriptions Case # Case Name/Description 1-1 Harvard Cheating Scandal Student cheating at Harvard raises questions about responsibilities of instructors and student personal responsibilities 1-2 Giles and Regas Dating relationship between employees of a CPA firm jeopardizes completion of the audit. 1-3 NYC Subway Death: Bystander Effect

Restoring public trust and confidence in the accounting profession This revision also includes: • Emphasis on values, ethics, and behaviors in a professional setting • Expanded coverage of professional codes of conduct and failure to maintain indepen- dence, integrity, objectivity, and professional skepticism • New audit requirements and clarified Statements on Auditing Standards effective in

Preface Why Did We Write This Book? The first edition of Ethical Obligations and Decision Making in Accounting: Text and Cases was written in the wake of the dot.com bubble and accounting scandals at companies such as Enron and WorldCom. The second edition was written in the wake of the financial meltdown of 2007–2008 that

Ethical Obligations and Decision Making in Accounting Text and Cases Third Edition min622IX_fm_i-xxii.indd imin622IX_fm_i-xxii.indd i 02/09/13 12:29 PM02/09/13 12:29 PM This page intentionally left blank Ethical Obligations and Decision Making in Accounting Text and Cases Third Edition Steven M. Mintz, DBA, CPA Professor of Accounting California Polytechnic State University, San Luis Obispo Roselyn E. Morris,

Deloitte use to convince top management to correct the materially misstated financial statements? The case study, requirement: · Read the question closely; be sure you know what is being asked. Briefly, indicated the facts of the case and write a brief outline of what you want to fit into your 3 pages. · Identify the

  Institutional Theory By applying a third perspective, institutional the- ory, we gain further insight. This theory does two things. First, it emphasizes that behavior is shaped by “institutional logics” (i.e., cognitive and nor- mative schemas that enable actors to comprehend their organizational worlds) that are legitimated outside the organization. These schemas can be highly