University Accounting Theory and Contemporary Issues Report Analysis

This report delves into accounting theory and contemporary issues, presenting two distinct scenarios: a professional audit engagement and a student academic integrity case. The professional scenario highlights ethical violations in auditing, specifically the breach of objectivity due to manipulation of audit work papers and a lack of adherence to proper procedures. The student scenario examines ethical breaches related to academic integrity, focusing on the use of unauthorized test banks. The report analyzes the ethical principles violated in each scenario, potential consequences for those involved, and rationalizations for the actions taken. Furthermore, it discusses the responsibilities of stakeholders and suggests alternative actions to uphold ethical standards within both the professional and academic contexts. The analysis underscores the importance of ethical conduct, transparency, and adherence to professional and academic integrity guidelines.

Running head: ACCOUNTING THEORY AND CONTEMPORARY ISSUES
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Name of the Student:
Name of the University:
Course ID:

1ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Table of Contents
Answer 1..........................................................................................................................................3
Answer 2..........................................................................................................................................4
Answer 3..........................................................................................................................................5
Answer 4..........................................................................................................................................6
Answer 5..........................................................................................................................................7
References........................................................................................................................................9

2ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Answer 1
Professional Scenario:
It has been observed from the professional scenario that Johnny is the in – charge on the
audit engagement for ABC company. The PCAOB (Public Company Accounting Oversight
Board) will visit this enterprise either for the purpose of inspection or investigation of audit
papers of ABC enterprise. Johnny has received request firm this enterprise manager relating to
this audit work papers. Although these work papers has been delivered, it has been found out that
the file is incomplete as two main documents are missing (Brewer et al. 2014). These involved
item worksheet and the final version of signed engagement letter. Although these work papers
have been attained after few initial issues, these do not have engagement letter involving clients’
original signature. However, Johnny attained client’s signature at request of manager by not
revealing actual insertion date. In this condition, the principle of auditing that has been violated
is objectivity principle. Fiolleau and Kaplan (2017) opines that under this principle, the auditors
are required to display highest professional objectivity level in gathering, assessing and
communicating the information relating to auditing activities. Additionally, auditors are required
to conduct balanced assessment of the relevant situation and hence there will be no influence
while they make judgments. In this case, manager of this enterprise has influenced Johnny’s
actions in submitting audit work papers (Dellaportas et al. 2014). Hence, Johnny cannot be
considered as independent, which reflects violation of objectivity principle. Both Johnny and
manger will face severe consequences if PCAOB members identifies that they have taken illegal
measures for submitting audit work papers.
Student Scenario:

3ACCOUNTING THEORY AND CONTEMPORARY ISSUES
The scenario highlights that Samantha and Mary Jo are two friends studying in same
class. Mary Jo lacks in accounting subject and hence there is a probability that she might not
attain pass markets in exam. Owing to this Samantha advised Mary for using test banks as study
guide. Mary Jo downloaded this test books but it is written in website that test banks are use for
instructors (Tormo-Carbó Seguí-Mas and Oltra 2016). But Mary ignored this instructions and
used this book to secure good marks in exam. This case reflects breaching of ethical principles
that involves- honesty, responsibility etc. As Mary has implemented shortcut for attaining good
marks instead of learning the subject, the honesty principle has been breached. According to
responsibility principle, individuals must maintain proper standard of conduct in learning.
However, both of them do not have responsibility to assure this institution integrity. Thus,
institution failing to catch Mary’s misconduct might sanction her for assuring integrity of this
university.
Answer 2
Professional scenario
This case study reflects that the ABC company has audit issue since two main documents
of this enterprise have been absent in final file. This might have huge affect on accounts books of
this company (Scott 2015). It has also been recognized that supporting file has been absent. For
instance, if revenue is one of the vital items of this ABC company’s, the management might
intend to see revenue generated from its subsidiary. However, if they do not obtain relevant
information, questions might be raised regarding the accurate financial information.. Hence, it
might lead to trust loss of shareholders and its brand image in market. Although supporting
worksheet was lost, Johnny had electronic version of this paper.

4ACCOUNTING THEORY AND CONTEMPORARY ISSUES
The manager of this enterprise is one of the vital stakeholders in this scenario as Johnny
performed the activities as per his directions. Although supporting paper has been lost, electronic
version was available on computer hard drive. However, Johnny reprinted this paper at the
managers direction but no explanations has been given during the time of making inclusion in
final file. Johnny also included original signature of client but true insertion date has not been
mentioned (Rankin et al. 2012). As a result, the managers responsibility would not be questioned
as the individual collaborated with Johnny. Hence, Johnny would be warned or terminated owing
to such irresponsible behavior.
Student scenario
Mary and Samntha are the two stakeholders of the university where Mary pursues studies. As
Mary approached Samantha for her inability in making preparation for exam, Samantha asked
Mary to use test banks for securing good marks in exam. If this university catches Mary, then it
might have adverse impact on her career. Thus, in this situation violation of academic integrity
will be violated and thus the university will have to impose strict actions on students to maintain
policies.
Answer 3
Professional Scenario
Johnny has performed his duties as per the directions of ABC company’s manager.
Accordingly, Johnny delivers work papers to the manager before arrival of PCAOB members.
Johnny being the head of audit team, the staffs working under his supervision will carry out this
internal audit work. After completion of this work, the report is given to this enterprise. The
manager asked for additional copy as he lost the original file (Madsen 2014). In this situation,

5ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Johnny should say that actual report is given to the enterprise and thus report has lost owing to
the manager’s negligence. Hence, Johnny’s decision can be rationalized.
Student Scenario
It has been seen that Samantha and Mary Jo are the two friends studying in same class.
Mary Jo lacks in Accounting 355 subject due to pressure of studies. Mary Jo used test banks as
per the advice of her friend Samantha for securing good marks in exam. In order to rationalize
this behavior, Mary Jo could say that test banks have been used for reference and thereby it
helped to enhance her knowledge. As a result, this facilitated Mary Jo to perform better in exam
through which her career would be improved.
Answer 4
Professional scenario
It has been seen from the given scenario that although supporting paper has been lost,
Johnny has its electronic version on computer hard drive. As per direction of the manager,
Johnny reprinted this paper and hence no explanations regarding this work papers have been
provided during the time of doing inclusion in final file (Hassard and Pym 2012). Additionally,
Johnny has kept original signature of client but true insertion date is not provided in this copy. In
this circumstance, Johnny might have informed top management of ABC Company regarding the
manager direction. Thus, individual might have restricted Johnny in manipulating revised
document in order to maintain personal and professional integrity.
Student scenario

6ACCOUNTING THEORY AND CONTEMPORARY ISSUES
In this situation, Mary Jo should have avoided test banks and also would have
recommended Samantha to refrain from using this while preparing for final exam. Thus, this act
will assure ethical integrity of both student and the University.
Answer 5
Professional scenario
After this action of Johnny has been exposed, Johnny would have kept silence because of
following reasons-
 Johnny has acted as per the direction of the manager of ABC company since this would
assure personal interest (Cameron and O'Leary 2015)
 Manipulations has been done in disclosure of this vital item without giving any
justification for late addition in file
 Johnny has met this enterprise clients that violated principle of confidential information
and independence of this enterprise
Therefore, in this case, Johnny would have informed the ABC company’s management about
the managers directions that he received and also provide correct information to PCAOB
members.
Student scenario
After disclosing the Mary Jo’s act, the reasons that she would have kept silence consists of
following-

7ACCOUNTING THEORY AND CONTEMPORARY ISSUES
 Mary Jo has used test banks that the students studying in this University is not supposed
to use
 Wrong certification has been given that Mary Jo complied with the norms as well as
regulations of the university
 The confession could have adverse affect on Samantha’s career progress, who is Mary
Jo’s friend (Cullingford and Blewitt 2015)
In this situation, Mary Jo should have refrained from using test banks and thus could have
suggested Samantha to avoid using this by reminding her rules and regulations of the University.

8ACCOUNTING THEORY AND CONTEMPORARY ISSUES
References
Brewer, P.C., Sorensen, J.E. and Stout, D.E., 2014. The future of accounting education:
Addressing the competency crisis. Strategic Finance, 96(2), pp.29-38.
Cameron, R.A. and O'Leary, C., 2015. Improving ethical attitudes or simply teaching ethical
codes? The reality of accounting ethics education. Accounting Education, 24(4), pp.275-290.
Cullingford, C. and Blewitt, J., 2013. The sustainability curriculum: The challenge for higher
education. Routledge.
Dellaportas, S., Kanapathippillai, S., Khan, A. and Leung, P., 2014. Ethics education in the
Australian accounting curriculum: A longitudinal study examining barriers and
enablers. Accounting Education, 23(4), pp.362-382.
Fiolleau, K. and Kaplan, S.E., 2017. Recognizing ethical issues: An examination of practicing
industry accountants and accounting students. Journal of Business Ethics, 142(2), pp.259-276.
Hassard, J. and Pym, D. eds., 2012. The theory and philosophy of organizations: critical issues
and new perspectives. Routledge.
Madsen, P.E., 2014. Has the quality of accounting education declined?. The Accounting
Review, 90(3), pp.1115-1147.
Rankin, M., Ferlauto, K., McGowan, S.C. and Stanton, P.A., 2012. Contemporary issues in
accounting. Milton, Australia: Wiley.
Scott, W.R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.

9ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Tormo-Carbó, G., Seguí-Mas, E. and Oltra, V., 2016. Accounting ethics in unfriendly
environments: The educational challenge. Journal of business ethics, 135(1), pp.161-175.