Ethicality of Accounting

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Ethicality of Accounting Activities Learning Team E - Ashley Horne, Brochelle Shirley, Erika Schmidt, and Mareta Guerrero ETH/376 September 30, 2013 Tammie Holland Ethicality of Accounting Activities To evaluate the ethicality of accounting activities, Learning Team E will review the Cynthia Cooper and WorldCom case using the following criteria. This review will identify the key accounting activity involved in this case and evaluate the accounting activity in terms of the AICPA Code of Professional Conduct. Additionally, determine how the accounting activity was or was not equitable to internal and external stakeholders and which aspects were ethical or unethical. Finally, through the identification of key team members in this case, this review will explain his or her ethical or unethical actions and how those actions influenced the events that occurred. Key Accounting Activity Involved The key accounting activity involved in the case of Cynthia Cooper and WorldCom was capital expenditures, which is defined as “…the funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment” (Capital Expenditure - Capex, 2013, para. 1). In this case, the capital expenditures were used as corruption to journalize large amounts of money incorrectly, as prepaid capacity, and moving from account to account (Mintz & Morris, 2011). This caught the attention of an internal auditor that started digging to found where the money was going. The prepaid capacity was used to cover the true nature of the expenditures, moving large amounts from the income statement to the balance sheet (Mintz & Morris, 2011). Evaluate in Terms of the AICPA Code According to Mintz and Morris (2011), “the AICPA Code of Professional Conduct six principles are responsibilities, the public interest, integrity, objectivity and independence, due
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