The Situation:

Certified Public Accountants (CPAs) provide valuable services for their clients, both businesses and individuals. Although its important to make clients happy, accountants have additional considerations when preparing financial statements and tax returns.

The Dilemma

Aaron Ault, is the owner of a small contracting business. In late January 2016, he delivered original expense and income records so that his CPA Katrina Belinski could prepare 2015 financial statements and tax returns for Aults small business firm. Several weeks later, Katrina delivered the complicated financial returns statements and tax returns to Ault. Aaron was pleased with the financial statements but realized that he was going to owe a lot of money in taxes. His business is just recovering from tough times and cant afford to pay a large tax bill. One particular large job was completed at the end of the year, and Ault decided that hed like to record this during the current year. This would result in a much lower taxable income for 2015. However, Ault is disappointed with Belinski, who tells him that she is not able to make this change. Now he is threatening to take his business elsewhere. Belinski is torn because Ault has been a long-time client and she does not want to lose his business.

1. What are the ethical issues in this situation?
2. What are the basic arguments for and against Aults position in this situation?
3. What are the basic arguments for and against Belinskis positions?
4. What do you think that Ault and Belinski should do in this situation?