20. You currently work in the SEC reporting division of a midsize, publicly traded company. The company has a Board of Directors and an Audit Committee. You have worked there for three years, and you have a cordial but professional relationship with your direct supervisor. The company has a hotline for reporting improper accounting, fraud, embezzlement, and other misconduct. The hotline accepts anonymous calls and is staffed by a division of a law firm that specializes in ethics and corporate compliance. The company also has a Code of Conduct that strictly prohibits retaliation against any employee who reasonably believes that misconduct has occurred. In each of the following cases, state whether the likelihood of you reporting misconduct to your direct supervisor is Low, Medium, or High:

a. Late at night, you saw a colleague place an expensive art object from the companys front lobby in the trunk of his car and drive away.

b. Late at night, you saw the company CEO place an expensive art object from the companys front lobby in the trunk of his car and drive away.

c. You were asked to improperly classify factory rent in General Overhead. It correctly should be capitalized as an element of Work in Process Inventory. Your colleague told you that, by doing this, the companys Gross Profit Margin on sales would be higher, at least in the short run. This will lead stock market analysts to upgrade the companys stock. d. You saw a colleague deliberately book a single sale twice. This results in reported Sales being too high.

e. You saw a colleague deliberately move a sale from January, Year 2, into December, Year 1, by altering the shipping and invoice dates.

f. Your company sustained a loss when a burglary occurred. The actual loss was $30,000, but your colleague exaggerated this loss, fling a claim with the companys insurer to recover for a $70,000 loss.

g. A client offered you a bribe during the course of an audit to look the other way and accelerate the recording of an installment sale to a high-risk customer entirely into the year that goods were delivered. Under GAAP concerning sales to uncreditworthy customers, some of the revenue properly should have been deferred until installment payments are received in a later year.

h. You suspect that a member of your internal audit team accepted a bribe because she has approved of a depreciation method for expected environmental reclamation costs that is grossly incorrect.

i. A foreign government official demanded a bribe from you to facilitate your companys shipment of goods rapidly through their Customs and Importation Department.

j. You suspect that a partner at your CPA firm is sharing confidential information about one of your clients with an outside investor that is trading the client companys stock.

k. You witnessed a fellow employee violating the companys policy against using the Internet during work hours.

l. You witnessed a fellow employee using pirated software at work