Ethics Case: Unscrupulous Partner Accounting

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Ethics Case: The Unscrupulous Partner 'The Unscrupulous Partner' is a case involving Andrea, a tax partner at a local CPA firm, and Ed McDouglass, the general partner of Skyline Views- a LLP that constructs, operates, and sells condominiums. As general partner, Ed acts as general manager over Skyline Views and devotes 100% of his time into the LLP. For this, he is allowed a “management fee” of up to 2% of expenses and 10% share of the year's net income if it exceeds $100,000. Ed has hired Andrea to do the tax return for the partnership. While Andrea was collecting data for the partnership return she came across data that “bothered her greatly.” She discovered the partnership's 'Miscellaneous Revenue' account actually consisted primarily of expense reductions. She also noticed that expenses had been blatantly lumped into the previous year which resulted in a significant increase in net income for the current year. Andrea did not feel comfortable with this information and confronted Ed to reconcile these differences. At this point Ed lost his temper and became confrontational spewing banter that she was not hired to audit numbers, his previous tax preparer had inquired about this, and had been fired as a result. Andrea decided to resign as tax preparer for Skyline Views, LLP. Ed didn't care but reminded her that he hired her and that she was not to speak to any of the limited partners. This case involves the misrepresentation of the financial statements provided for the return and whether Andrea should disclose her findings to the limited partners. The ethical issues of this case are protecting the public interest and maintaining Andrea's integrity. The only individual involved in this ethical issue is Andrea. While Ed is a walking ethical dilemma, he is not a CPA and therefore, is not held to the same standards that Andrea is. Andrea is obligated to protecting

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