a)Sara has finally returned to her job as an accountant at World-wide Enterprises (WWE), a small family-run hardware supplies chain, after a five-year extended maternity break. She has returned at an important time in the fiscal year: tax season. As she reviews the books for the period she was gone, she notices little anomalies which suggest that WWE has been reporting much less income than they have actually made in the last two years. Troubled by this, Sara approaches the company owner, Aurangzeb, who comes clean and explains that he has been altering the books because of a personal financial slump that he fell into because of a gambling problem. He promises that from now on, now that Sara is back, he will no longer attempt to reduce his tax liability because he and the company are in a better position now. However, he also makes clear that he cannot afford to pay the back taxes and their penalties.

If Sara reports the fraud to the tax authorities, the company may close. If it comes out that she did not report it, she may have to answer to the accounting body of which she is a member. What should Sara do?