You graduated from Deakin Business School with a major in accounting and financial planning. On graduation you have been lucky to secure a job in an accounting practice that also offers financial planning services to their clients. One of the qualities that helped you to secure the position is your willingness to take on challenging tasks. 

 

You are assigned to a major financial planning client that has very complicated finances, but given your track record and resilience, you are considered to be sufficiently capable of meeting the needs of the client. The client is seeking a large loan from a financial institution to fund the development of a residential apartment block. The financial institution has requested the client to provide them with several reports to support the application for finance to determine their ability to service the loan and repayments, manage cash flow and provide appropriate security for the loan.

 

 The client has asked your practice to prepare the requested reports, including budgets, cash flow reports, asset and liability holdings etc. The client is a long-standing client of the accounting practice who have prepared all of his taxation and accounting information for many years, and this has been very profitable for the firm. However, you are aware that the client is difficult to deal with and very demanding. You have been asked to prepare most of the reports subject to supervision by a senior financial adviser. Despite the amount of technical knowledge required in both finance / financial planning and accounting, you feel confident in generating the required information given that you will have an experienced planner supervising your work and taking responsibility for the project. 

 

As the end of the financial year approaches, you are tasked to p.r.e.p.a.r.e a new budget report for the client. You feel confident in your understanding of the client, and in your ability to get the job done to a high standard. However, you recently notice that there seems to be some misinformation and irregularities regarding the client's finances and accounting reports that were generated by the accounting side of the practice. 

 

You later find out that the supervisor who was assigned over you, and to help you manage the client, is being moved and reassigned to a different client. There is no replacement supervisor, and you are being told that moving forward it is your sole responsibility to manage the client given the good work you have been doing to date. You are advised that if you d.o. a good job with this client and everything goes through smoothly with the reports provided to the financial institution, then you will be up for a significant bonus and promotion. 

 

You ask why your supervisor had been moved, but you are not provided with any clear reason. Instead, they try to make it sound like you are being provided with a great opportunity, but something doesn't feel right, because now only your name is to be attached to the reports provided to the client. While you can see that this is a huge promotion opportunity, you also feel nervous given the lack of supervision and support from senior management. 

 

As part of your due diligence, you have decided to further investigate the historical financial records of the clients. You are shocked to discover that some of the financial information of the client prepared by the accountants of the practice was based on inaccurate and/or loosely applied application of accounting measurement rules, and you do not believe that they are compliant with current accounting standards and procedures. You believe the client's financial performance was deliberately made to appear more favourable than what it really was. However, you only have limited experience in accounting and therefore you may be wrong or not be aware of some issues. 

 

When you query the accountants and your previous supervisor, they dismiss your concerns and advise that they are technically following the accounting standards correctly, and that the accounting standards allow discretion to suit the circumstances of the client. They advise the client is very important to the practice. Despite your limited accounting experience, this situation does not feel right to you. Furthermore, it is clear that no one is willing to have their name on any of the paperwork in relation to the client other than you. 

 

1. Identify and discuss the ethical issues or dilemmas present in the case study. (Suggested words: 200) 

 

2. Four ethical decision-makings models are covered in MAA250: 

i. Langenderfer and Rockness Model (Cull et al. 2021) / The American Accounting Association (AAA) 

ii. Decision Making Model (Hartman et al. 2020) 

iii. Good Decision-Making Model (Longstaff et al. 2020) 

iv. The Moral Intervision Model Which one of the four ethical-decision making models has your group chosen to analyse this case study? Justify why your group chooses this model (as opposed to the alternate models) as the approach to resolve the ethical dilemma. (Suggested words: 300) 

 

3. Apply the chosen ethical decision-making model to critically analyse and resolve ONE of the ethical dilemmas presented in the case study. In doing so, your group is expected to:

 • Apply relevant ethical theories and professional codes of conduct within the discussions; 

 • Undertake research to justify and enhance your discussion with relevant literature and further evidence/examples; 

 • Consider the alternatives for addressing the ethical issue in the case study, and determine the best course of action; and 

 • Provide a conclusion to the case study on how the ethical issue can be addressed.