Accounting Ethics

Case 8-3: KPMG Tax Shelter Scandal

1. Describe the link between the tax culture at KPMG and leadership. Do you believe there is a direct correlation between dysfunctional tax decisions and culture?

2. How can tax positions taken reflect leadership style?

3. Describe the relationship between the tax shelters developed by KPMG and the management of the tax practice at the firm.

4. What's wrong with a CPA firm, such as KPMG, aggressively seeking to establish tax shelters for wealthy clients? Did KPMG's role in this regard reflect a failure of leadership or a failure of judgment? Explain. Case 8-3: KPMG Tax Shelter Scandal is on pages 520-523 of your textbook.