Do you think the bystander effect was at work in the subway death incident?
How might that effect translate to a situation where members of a work group observe finan- cial improprieties committed by one of their group that threatens the organization? In general, do you think that someone would come forward? How might culture play into the action that would be taken?
2. Another explanation for the inaction in the subway inci- dent is a kind of moral blindness, where a person fails to perceive the existence of moral issues in a particular situation. Do you believe moral blindness existed in the incident? Be sure to address the specific moral issues that give rise to your answer.
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46 Chapter 1 Ethical Reasoning: Implications for Accounting
Case 1-4
Lone Star School District Jose and Emily work as auditors for the state of Texas. They have been assigned to the audit of the Lone Star school dis- trict. There have been some problems with audit documenta- tion for the travel and entertainment reimbursement claims of the manager of the school district. The manager knows about the concerns of Jose and Emily, and he approaches them about the matter. The following conversation takes place:
Manager: Listen, I’ve requested the documentation you asked for, but the hotel says it’s no longer in their system.
Jose: Don’t you have the credit card receipt or credit card statement?
Manager: I paid cash. Jose: What about a copy of the hotel bill? Manager: I threw it out. Emily: That’s a problem. We have to document all
your travel and entertainment expenses for the city manager’s office.
Manager: Well, I can’t produce documents that the hotel can’t find. What do you want me to do?
Questions 1. Assume that Jose and Emily are CPAs and members
of the AICPA. What ethical standards in the Code of Professional Conduct should guide them in dealing with the manager’s inability to support travel and entertain- ment expenses?
2. Using Josephson’s Six Pillars of Character as a guide, evaluate the statements and behavior of the manager.
3. a. Assume that Jose and Emily report to Sharon, the manager of the school district audit. Should they inform Sharon of their concerns? Why or why not?
b. Assume that they don’t inform Sharon, but she finds out from another source. What would you do if you were in Sharon’s position?
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Chapter 1 Ethical Reasoning: Implications for Accounting 47
Case 1-5
Reneging on a Promise
Part A
Billy Tushoes recently received an offer to join the account- ing firm of Tick and Check LLP. Billy would prefer to work for Foot and Balance LLP but has not received an offer from the firm the day before he must decide whether to accept the position at Tick and Check. Billy has a friend at Foot and Balance and is thinking about calling her to see if she can find out whether an offer is forthcoming.
Question 1. Should Billy call his friend? Provide reasons why you
think he should or should not. Is there any other action you suggest Billy take prior to deciding on the offer of Tick and Check? Why do you recommend that action?