Ethical, Fraud, and Legal Issues for Accountants

Conduct research and answer the questions below in your own words. Identify the Facts; Identify Ethical Dilemma and Ethical Reasoning Theories; Identify Stakeholders and Obligations; Identify Core (professional) Values/Virtues; Identify Operational and Accounting Issues; Identify Alternative Options; Identify Consequences of Options; and Choose an alternative course of action and defend option selected from an ethical reasoning perspective (i.e. rights, justice, virtue) after considering the consequences. Part B - Ethics and the Coronavirus As the number of COVID-19 cases continues to grow and the death toll mounts, its useful, from an ethics perspective, to use our experiences to date to evaluate our personal responsibilities to each other in this crisis, because many Americans are dying because no hospital will take them. Government Response There is no doubt the U.S. government was not prepared for the virus outbreak. The result was a severe lack of testing kits, insufficient number of ventilators, and concern about the number of hospital beds in intensive care units, leading to the rationing of medical care. The slow response contributed to the need for states and local governments across the country to declare a state of emergency. Citizens were told to self-isolate, not go out except when absolutely necessary, practice social distancing, wash hands with soap and water, not touch their faces and avoid groups of more than 10 people. Many cities totally shut down for all intents and purposes. The early failings on the government side raise questions about the competency and believability of federal officials. It seems like the former president had a different take on the severity of the crisis and how quickly it could be resolved than the scientists, prompting some Americans to wonder: Who Should We Trust? Personal Responsibility Generally speaking, most Americans have acted carefully by practicing social distancing, using facemasks and getting vaccinated. Others seem to be anti-mask, anti-vaccine, while some are hoarding supplies and bought enough toilet paper to last through years. It was reported that a Tennessee man bought 17,700 bottles of hand sanitizer and was being investigated for price-gouging. There were some horror stories of fights breaking out among customers in stores like Costco, Target, Walmart and others over items in short supply. Also, there has been reports of inflight fights caused by disagreements on COVID-19 protocols. Individual Rights The Declaration of Independence grants citizens with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. How should we feel about the restrictions on our liberties? Mandating vaccine, asking citizens to shelter in place, restricting movements, and shutting down restaurants, pubs and bars may seem like an extreme measure. Ethical Issues There is an expression Just because you have a right to do something doesnt make it the right thing to do. This is an apt description of the beachgoers on spring break. It also characterizes the behavior of an irresponsible passenger who got on a Jet Blue plane while awaiting the results of a coronavirus test thereby putting all 114 people on board at risk. Jet Blue banned him from all future flights after he learned during the flight that he had tested positive. We are living in a time of a new normal. The restrictions on our activities and physical movement might be a warning that we need to look out for each other and treat each other the way we wish to be treated, the essence of The Golden Rule. In many respects the way individuals have handled the crisis depends on whether they follow the ethical principle of egoism allow individuals to pursue their self-interest or adhere to a more communal ethic. This could be enlightened egoism where self-interest is pursued but only after the impact of ones actions on others is considered. In other words, if I decide to fly to another city to meet up with a loved one, the possibility exists that I might contract the coronavirus. Should I take that chance knowing I may place others at risk? Accounting Issues Many businesses have been devastated by the spread of the virus. The airline industry, hotels, places of entertainment and cruise ships are losing billions of dollars. The problems encountered in business due to the spread of the coronavirus creates risks and uncertainties from an accounting and auditing perspective. The overriding issues are whether to record or disclose amounts related to the loss in value of assets, possible future losses given the likely duration of the virus, and disruptions in revenue streams. In this regard, making accurate estimates is important as is having the internal controls over financial reporting to make reliable risk assessments. Also, the underlying issue of whether a business is a going-concern will be a challenge for auditors.

Questions 1. Using ethical principles to support your view, evaluate whether the COVID-19 pandemic was handled ethically by the a. Citizens b. Corporations, and c. Government.