Question

descr

nce to rformance. 1. New Cgislation II. Conflicting industry practices III. Evolution of a new form of business transaction (1) I and II (3) I and III (2) II and III (4) I, II, and III c. Which of the following is not a provision of the Sarbanes-Oxley Act of 2002? (1) The auditor of an issuer may not provide internal audit outsourcing services for the issuer. (2) Audit documentation must be maintained for five years. (3) The lead and reviewing partners must rotate off the audit after five years. (4) Tax services must be preapproved by the audit committee. e violations of the AICPAC be in violation of the A tion of the AICHA DISCUSSION QUESTIONS AND PROBLEMS ent's financial statements ding the CPA's expertise instead In-class Discussion hall not disclose any con essional engagement excer ng situations would disc 4-2V OBJECTIVES 4-1, 4-2) Newspaper headlines frequently highlight instances where busi- ness professionals, politicians, and others are accused of engaging in unethical behavior. In response, there have been numerous attempts to reduce their occurrence. For example, some have argued for universities to include more courses in ethics. a. Describe what constitutes "ethics" and highlight the challenges of developing a set of rules and guidance to increase ethical behavior in society. b. Why is ethics important to the conduct of business in a market-based economy? c. Why do individuals act unethically? d. What are common rationalizations individuals use to justify their unethical behavior? e. Discuss whether ethics should be taught, for example, in university courses. 4-22 (OBJECTIVES 4-5, 4-6) The following situations involve the provision of nonaudit services. Indicate whether providing the service is a violation of AICPA rules or SEC rules including Sarbanes-Oxley requirements on independence. Explain your answer as necessary. 2018 DeVry/Becker Educational Development Corp. Used with permission. All rights reserved. with a subpoena issued by erly discharge the CPA'S dards. Chapter 4 / PROFESSIONAL ETH

Answer 1

Requirement a.

Ethics could be defined as the moral principles which helps us in segregating right from wrong. These are the ideals which one shall imbibe in their lives. The major trial of developing set of rules and procedures to intensify ethical behavior is that it is not easy to arrange for an complete definition of ethical behavior which is valid in all situations. There are different concepts that define what is ethical behavior and an ethical behavior in one instance might not be ethical in other instance. Hence developing a policy would be difficult.

Requirement b.

Ethics is vital for the conduct of business in market based economy since it aids in fulfilling with the laws and regulations and nurturing associations with the stakeholders including the employees. An ethical company develops status in the market and this in turn helps it to achieve higher profits. Customers are nowadays more motivated towards companies which conduct their business ethically.

Requirement c.

Individuals occasionally act unethically and that could be owing to numerous reasons. The person might be materialistic and can go to any extent to please his greed. He might hero-worship a person who is himself unethical and follows his ways. Bitterness or jealousy or the feeling of outdoing peers by any means possible can be yet another reason. e greed or some resentment or career progress issues etc.

Requirement d.

The mutual validations people often use to defend their unethical behavior by thinking everyone else is also doing it. Also one might think that nobody is offended by the unethical behavior. They think that it was significant and the need of the hour. Some also try justifying affirming that we are humans and we can make errors. Also ethics is a luxury that not everybody can afford.

Requirement e.

Ethics should be imparted as part of university courses. With the growing threat of unethical conduct surrounding us it is undeniably necessary to make people understand from young age itself about the significance of ethical behavior and how one should never approve unethical means in their lives.