Question
Corruption in the Auditor Inspection Process: The Case of KPMG and the PCAOB s 1. The CPA designation comes with a duty to serve the
Corruption in the Auditor Inspection Process: The Case of KPMG and the PCAOB
s 1. The CPA designation comes with a duty to serve the public interest and uphold the public trust. A Supreme Court decision in 1984 stated: By certifying the public reports that collectively depict a corporations financial status, the independent auditor assumes a public responsibility transcending any employment relationship with the client. The independent public accountant performing this special function owes ultimate allegiance to the corporations creditors and stockholders, as well as to the investing public. This public watchdog function demands that the accountant maintain total independence from the client at all times and requires complete fidelity to the public trust. U.S. v. Arthur Young & Co., 465 U.S. 805, 818 (1984)
a. How does the auditors public duty compare to the obligations of other professions governed by ethical codes (e.g., doctors, journalists, lawyers)?
b. How did the defendants in this case violate their public duty?
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