The Accounting Practitioner

You are a sole practitioner of a successful public accounting firm. You used to provide a range of accountancy services for Bremerton Hardware, a small company that owns and operates a hardware store. To your surprise, Bremerton Hardware solicited bids from other public accounting firms and chose to switch to a different practice for its accounting needs. You believe that you were unsuccessful in the proposal on the basis of cost alone, as Bremerton Hardwareis not very profitable, and suffers from the competition of another hardware business in a neighboring town, Byers Hardware.Both you and the other accounting firm Bremerton Hardware has now employed have been asked to propose a fee schedule for a due diligence evaluation for the possible purchase of Byers Hardware.

In addition, you are providing continuity for another firm in your town because the owner he suffered a heart attack, and so you are currently acting for a number of his clients. He is not expected to resume practicing for three months. Your formal agreement is in effect the entire period.One of the client businesses of the incapacitated practitioner, Speedy Electric, operates a shop selling appliances. The director and majority shareholder of Speedy Electric has called you and explains that she intends to make an offer to purchase Byers Hardware, the same small hardware business that Bremerton Hardware is seeking to acquire. She is aware that there is another bidder for the business, but is unaware that it is Bremerton Hardware, or that Bremerton Hardware used to be your client. When the meeting is over, you start to feel uneasy. You want to help Speedy Electric, but you realize that you are also in possession of confidential information concerning the plans of your previous client, Bremerton Hardware.

The ethical issues are: Conflict of Interest, Confidentiality, and Integrity

QUESTIONS

1. What are the main alternative actions or policies that might be followed in responding to the ethical issues and facts that might be unknown?