Fast forward five years from the events of Mini-Case 1. Popejoy & Lee LLC is still an accounting firm based in Hillsborough, NC, offering essentially the same lines of service tax, audit and assurance, financial planning, and advisory services. The firm is somewhat larger, with a professional staff of 50 CPAs. The firm is still managed in a highly collaborative, very cohesive manner by Juanita Lee, who heads up the tax practice, Earl Lee, who heads up auditing and assurance, and Tawrence Popejoy, who heads up financial planning and advisory services. Wingo Corporation has now been an assurance client of Popejoy & Lee LLC for four years. Tom Wingo and Susan Lowenstein continue to serve as CEO and EVP-CFO, respectively, of Wingo Corporation. The company remains privately held. Shortly after completing the AICPA Code of Professional Conduct consulting engagement five years ago, you accepted a position in the auditing and assurance practice of Popejoy & Lee LLC. You are now a manager in the firm and have become the go-to in-house expert on matters of ethics and professionalism. Two weeks ago, you received a request from Tawrence Popejoy to have lunch with him; Tawrence stated that he wanted to get your input on an unspecified ethics issue. That lunch meeting took place over the lunch hour today. Tawrence started the meeting by telling you that he wanted you to keep the conversation in complete confidence until you hear otherwise from him (to which you agreed). He then proceeded to tell you that he and Susan Lowenstein have become romantically involved. (Tawrence has never been married, and Susan is recently separated from her husband, Herbert Woodruff, who is a violinist in the Mount Airy symphony orchestra.) He told you that he and Susan have made every effort to keep their relationship under wraps and that as far as they know, neither Juanita Lee and Earl Lee nor Tom Wingo know about the relationship. Tawrence expressed a nagging concern that his relationship with Susan might create independence problems for the firm. He is especially concerned in light of the fact that Wingo Corporation remains the largest audit client of Popejoy & Lee. He praised you for your wisdom and expertise in all things ethics and asked if you could quietly do some research for him. You told him youd get back to him next Friday with your findings and recommendations. As you attempt to drift off to sleep at the end of a long day, your mind is preoccupied with Tawrences ethical dilemma and the potential impact it might have on Popejoy & Lee LLC. You climb back out of bed, turn on your computer, and open up the AICPA Code of Professional Conduct.

Ethical Decision Due Diligence (ED3) Analysis 1. What is the ethical issue, what are the relevant facts and circumstances, and who are the actors? 2. Who are the relevant stakeholders (individuals and organizations), and what is at stake for each? 3. What fundamental Principles of the accounting profession, what bedrock values, are at stake and why? 4. Compliance with which Rule/s is being threatened, which of the AICPA Conceptual Framework Approaches should you use to analyze such threats, and how would you characterize the identified threat/s? 5. What Interpretations, if any, do you consider to be applicable, either directly or indirectly? 6. In light of your analysis through summary question 5, do you consider the threats youve identified to be at an acceptable level or not? 7. What specific course of action and/or safeguard/s do you recommend?