Question
Each of the following scenarios is independent. Discuss the ethical considerations of each scenario. 1.Hugh Moore, CPA, was a director of Columbia Developments (Columbia), a
Each of the following scenarios is independent. Discuss the ethical considerations of each scenario.
1.Hugh Moore, CPA, was a director of Columbia Developments (Columbia), a land development company listed on the Toronto Venture Exchange. Columbia has been audited by a sole practitioner since 2002, when the company was incorporated. Hugh was also a member of Columbia's audit committee. Hugh was not an employee of Columbia. He worked full time as president and CEO of a private financial consulting company. Hugh resigned from Columbia's board and audit committee on January2, 2020.
On September2, 2019, Hugh had been approached by Columbia's CEO, who told Hugh that the 2018 financial statements contained a substantial error. The CEO felt that Hugh would have some good advice. Over dinner that night, Hugh discussed the issue with his wife, Virginia. Virginia is an audit manager with a large national CPA firm.
On December29, 2019, after exercising his remaining stock options, Hugh sent a letter to his fellow audit committee members, bringing their attention to the financial statement error.
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