Need final project edited. Please see the attached. Each sub-heading needs to be addressed in detail. Thanks

Need final project edited. Please see the attached. Each sub-heading needs to be addressed in detail. Thanks
ACC 696 Final Project Guidelines and Rubric The final project for this course is a case study in which students will select a recent real-world accounting ethics case from the last 5 years, involving earnings mismanagement, fraud, poor internal controls, or poor corporate governance. From the perspective of an accounting professional, each student will analyze responsibilities to stakeholders while considering theoretical models of ethical behavior, the AICPA Code of Professional Conduct, emerging technologies, regulatory activities, and (if applicable) international accounting standards. Overview Unfortunately, there is no shortage of examples of unethical situations and ethics violations within corporations. Some cases produce wide-ranging and devastating effects on all parties involved. Whether it is reduced investor confidence, reductions in a company’s credit rating, or even bankruptcy, these situations are important to analyze in order to determine effective strategy for avoiding ethical obstacles in the future. You are encouraged to put yourself in the place of both the involved employees as well as the stakeholders. You are encouraged to select a significant case that is personally interesting and/or relevant to you professionally. This assessment will evaluate your mastery with respect to the following course outcomes:  Analyze legal, social, and economic developments for their defining role in ethical expectations of the business and accounting profession  Assess the ethical responsibilities of professional accountants to internal and external stakeholders relating to the financial reporting process  Apply theoretical models of ethical behavior to contemporary accounting issues  Evaluate emerging technologies, regulatory activities, and international accounting standard setting for their impact on the ethical behavior of accounting professionals  Develop an ethical framework for setting appropriate standards of conduct for stakeholders in the accounting process Prompt Your case study should answer the following prompt: What ethical framework should be utilized when setting appropriate standards of conduct for professional accountants in order to promote ethical values and decision making? Specifically, the following critical elements must be addressed: I. Background What company is the subject of the case? Why did you choose this company/ethical situation? What ethics violations were discovered? II. Ethical Violations a) Who were the main participants involved in perpetrating the violations? Discuss the ethical responsibilities of professional accountants to the following stakeholders regarding the financial reporting process. How were the stakeholders affected by the ethics violations? i. Internal ii. External b) What AICPA Codes of Professional Conduct were violated? i. What is the importance of independence, when is independence required, and why must you be independent both in fact and in appearance? ii. Did the main participants adhere to moral and ethical principles? Soundness of moral character? Honesty? In other words, discuss the case as it relates to the integrity of the main participants. iii. Did the main stakeholders, including the professional accountants, maintain their objectivity? Explain. c) What were the implications of these violations on the business and accounting profession from the following perspectives? i. Legal ii. Social iii. Economic d) Does the company have a specific code of ethics? Were any of the components of the code violated? Discuss. III. Theoretical Models a) What ethical models were violated in this case? Provide detailed rationale to support your claim. b) How could ethical models have been used to produce better decisions and outcomes? In other words, compare and contrast ethical models for their potential contributions to better decision-making. IV. External Influences and International Accounting Standards a) What impact, if any, do regulatory activities have on the ethics of this case? If not applicable to this case, discuss possible overall impacts of regulatory activities for ethical situations in general. b) What impacts, if any, do international accounting standards have on the ethics of this case? If not applicable to this case, discuss possible overall impacts of international accounting standards for ethical situations in general. c) What impacts, if any, do emerging technologies have on the ethics of this case? If not applicable to this case, discuss possible overall impacts on ethical situations in general. V. Ethical Framework a) Propose an ethical framework for setting appropriate standards of conduct for professional accountants producing a higher level of ethical values and decision making, as they relate to this case. The framework should include the ways in which management will be involved in the process and what company resources should be available to employees to help make them more ethical choices. b) Could internal controls have been utilized to produce more ethical behavior? Would a plan by corporate governance be an appropriate vehicle for delivering these internal controls to encourage ethical behavior? Discuss. Milestone One: Background and Ethical Violations Milestones In Module Four, you will submit the first draft of Section I: Background and Section II: Ethical Violations of the final project. You will submit this draft to the instructor for feedback, which you will incorporate into the final version of the final project. This milestone is graded with the Milestone One Rubric. Milestone Two: Theoretical Models and External Influences and International Accounting Standards In Module Seven, you will submit the first draft of Sections III and IV of the final project. You will submit this draft to the instructor for feedback, which you will incorporate into the final version of the final project. This milestone is graded with the Milestone Two Rubric. Final Submission: Ethics Case Study In Module Nine, you will incorporate your instructor’s feedback from Milestones One and Two. Submit your completed final draft of the ethics case study, including Section V, Ethical Framework. This submission is graded with the Final Project Rubric. Final Project Rubric Guidelines for Submission: Students should submit a well-developed analysis of the ethical framework utilized when setting appropriate standards of conduct for professional accountants in order to promote ethical values and decision making. The paper should be 12–15 pages long and include a minimum of 8 references, which should be peer-reviewed scholarly research. Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Background Meets “Proficient” criteria and expands on the background and ethical violations using a variety of supporting research Describes the situational background of the case including a brief description of the ethical violations Describes the situational background of the case, but omits key elements and/or ethical violations Does not describe the situational background of the case or does not provide a brief description of the ethical violations 5 Ethical Violations: Responsibilities (Internal) Meets “Proficient” criteria and expands on the impact beyond immediate internal stakeholders, encompassing the internal environment Assesses the ethical responsibilities of professional accountants in relation to internal stakeholders, including how the stakeholders were affected by the violations Assesses the ethical responsibilities of professional accountants in relation to internal stakeholders and how the stakeholders were affected by the violations, but assessment is missing key participants or fails to adequately address the impacts to internal stakeholders Does not assess the ethical responsibilities of professional accountants in relation to internal stakeholders and how the stakeholders were affected by the violations 5 Ethical Violations: Responsibilities (External) Meets “Proficient” criteria and expands on the impact beyond immediate external stakeholders, encompassing the external environment Assesses the ethical responsibilities of professional accountants in relation to external stakeholders, including how the stakeholders were affected by the violations Assesses the ethical responsibilities of professional accountants in relation to external stakeholders and how the stakeholders were affected by the violations, but assessment is missing key participants or fails to adequately address the impacts to external stakeholders Does not assess the ethical responsibilities of professional accountants in relation to external stakeholders and how the stakeholders were affected by the violations 5 Ethical Violations: AICPA Codes (Independence) Meets “Proficient” criteria, and examination includes harm caused by independence violations Examines independence-type ethical violations (as defined by the AICPA Code) within the case and addresses the importance of independence in fact and appearance Examines independence-type ethical violations (as defined by the AICPA Code) within the case, but omits key independence violations or does not address the importance of independence in fact and appearance Does not examine independence-type ethical violations within the case 3 Ethical Violations: AICPA Codes (Integrity) Meets “Proficient” criteria, and examination includes harm caused by integrity violations Examines ethical violations in regard to the integrity (as defined by the AICPA Code) of the main participants within the case Examines ethical violations in regard to the integrity (as defined by the AICPA Code) of the main participants within the case, but omits key integrity violations or examination lacks detail Does not examine ethical violations of the main participants within the case 3 Ethical Violations: AICPA Codes (Objectivity) Meets “Proficient” criteria, and examination includes specific examples illustrating objectivity or the lack thereof Examines the objectivity (as defined by the AICPA Code) of main stakeholders within the case, including a detailed analysis of the objectivity of the professional accountants Examines the objectivity (as defined by the AICPA Code) of main stakeholders within the case, but does not include a detailed analysis of the objectivity of the professional accountants, or overall examination is lacking in detail Does not examine the objectivity of main stakeholders within the case 3 Ethical Violations: Implications (Legal) Meets “Proficient” criteria and expands the analysis beyond obvious legal implications Assesses legal implications of ethical violations on the business and accounting profession Assesses legal implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case Does not assess the legal implications of ethical violations on the business and accounting profession 4 Ethical Violations: Implications (Social) Meets “Proficient” criteria and expands assessment beyond obvious social implications Assesses social implications of ethical violations on the business and accounting profession Assesses social implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case Does not assess social implications of the violations on the business and accounting profession 4 Ethical Violations: Implications (Economic) Meets “Proficient” criteria and expands the analysis beyond direct economic impacts Assesses economic implications of ethical violations on the business and accounting profession Assesses economic implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case Does not assess economic implications of the violations on the business and accounting profession 4 Ethical Violation: Code of Ethics Meets “Proficient” criteria and includes a discussion on how the company’s Code of Ethics could have been used to prevent the violations Determines if the ethical violations identified in the case violate components of the company’s own Code of Ethics and describes each violation in detail Determines if the ethical violations identified in the case violate components of the company’s own Code of Ethics, but does not adequately describe the violations or omits key violations Does not determine if the ethical violations identified in the case violate components of the company’s own Code of Ethics 5 Theoretical Models: Violated Meets “Proficient” criteria and uses scholarly research in justification of selected model Applies theoretical models to the chosen case to determine which model was violated and provides justification of claim Applies theoretical models to the chosen case to determine which model was violated, but does not provide adequate justification of claim or omits key models in application to the case Does not apply theoretical models to the chosen case 8 Theoretical Models: Better Decisions Meets “Proficient” criteria and determines which models would be the most effective to the ethics in this case Compares and contrasts applicable theoretical models for the ways they could have contributed to better decisions Compares and contrasts theoretical models for the ways they could have contributed to better decisions, but does not utilize applicable models, or discussion is lacking in detail Does not compare and contrast theoretical models for the ways they could have contributed to better decisions 5 Influences and Standards: Regulatory Activities Meets “Proficient” criteria and relates the impacts of regulations to the overall ethical environment Evaluates the impact of regulatory activities on the ethics in this case or, if not applicable to this case, the overall impact on ethical situations in general Evaluates the impact of regulatory activities on the ethics of the case or in general, but omits key relevant regulatory activities or fails to apply them directly to the case Does not evaluate the impact of regulatory activities on ethical situations 4 Influences and Standards: International Accounting Standards Meets “Proficient” criteria, including both research and examples. Evaluates the impact that international accounting standards have on the ethical environment, including the impact on this case Evaluates the impact of international accounting standards on the ethics in this case or explains why international standards were not considered Evaluates the impact of international accounting standards on the ethics in the case or explains why international standards were not considered, but evaluation misses key impacts, fails to apply them directly to the case, or explanation of why international standards were not considered is not adequately detailed Does not evaluate the impact of international accounting standards on the ethics of this case or explain why international standards were not considered 4 Influences and Standards: Emerging Technologies Meets “Proficient” criteria and uses examples to draw connections between technology and ethics Analyzes the impact of emerging technology on ethical violations within the case or, or if not applicable to this case, the overall impact on ethical situations in general Analyzes the impact of emerging technology on the ethical violations within the case or the overall impact on ethical situations in general, but analysis misses key impacts or analysis is lacking in detail Does not analyze the impact of emerging technology on the ethical violations 5 Ethical Framework: Proposal Meets “Proficient” criteria, and the framework is comprehensive and multi-dimensional Proposes an ethical framework for setting appropriate standards of conduct, including management’s involvement and suggested employee resources Proposes an ethical framework for setting appropriate standards of conduct, but framework is not fully developed or is missing key elements, such as management’s involvement or suggested employee resources Does not propose an ethical framework for setting appropriate standards of conduct 12 Ethical Framework: Internal Controls Meets “Proficient” criteria, and evaluation considers this case as well as other environments Evaluates the promotion of ethical behaviors through the use of internal controls, including corporate governance Evaluates the promotion of ethical behaviors through the use of internal controls, but evaluation does not include corporate governance or discussion is lacking in detail Does not evaluate the promotion of ethical behaviors through the use of internal controls 10 Articulation of Response Meets “Proficient” criteria and has excellent syntax and sentence construction Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 11 Earned Total 100%
Need final project edited. Please see the attached. Each sub-heading needs to be addressed in detail. Thanks
This table lists criteria and criteria group name in the first column. The first row lists level names and includes scores if the rubric uses a numeric scoring method.Criteria Exemplary Proficient Needs Improvement Not Evident Criterion Score Background 10 points Meets “Proficient” criteria and expands on the background and ethical violations using a variety of supporting research 9 points Describes the situational background of the case including a brief description of the ethical violations 7 points Describes the situational background of the case, but omits key elements and/or ethical violations 0 points Does not describe the situational background of the case or does not provide a brief description of the ethical violations Score of Background,9 / 10 Criterion Feedback Yvonne, you have a generally on point overview of the factual background of the case. The first five or so sentences on page 1 are highlighted as matching to a source which you seem to have cut and pasted from something. I recommend that you add an in-text citation to attribute the information to its source. Ethical Violations: Responsibilities (Internal) 10 points Meets “Proficient” criteria and expands on the impact beyond immediate internal stakeholders, encompassing the internal environment 9 points Assesses the ethical responsibilities of professional accountants in relation to internal stakeholders, including how the stakeholders were affected by the violations 7 points Assesses the ethical responsibilities of professional accountants in relation to internal stakeholders and how the stakeholders were affected by the violations, but assessment is missing key participants or fails to adequately address the impacts to internal stakeholders 0 points Does not assess the ethical responsibilities of professional accountants in relation to internal stakeholders and how the stakeholders were affected by the violations Score of Ethical Violations: Responsibilities (Internal),0 / 10 Criterion Feedback Yvonne, the next section to be addressed in your paper is “Impacts on Internal Stakeholders.” I could not find such a section because your paper does not have any section headings. I continued scrolling through your paper to the end and note that such a section does not exist. In circling back to your table of contents, I note that there are only two items: background and ethical violations, which pretty much corresponds to the material that you have offered. Unfortunately, the material that you have offered has no connection to the rubric for the assignment, which lays out the specific requirements of the assignment that must be met in order to earn points. For example, on page 6 for unknown reasons, you have engaged in a discussion of IFRS. It is not evident how that content has a logical place on page 6 or has any relation to your discussion of the “ethical violations” because Celadon is a US company that reports its financial statements in accordance with GAAP. Note, however, that in milestone two there is a section in which students will discuss the GAAP vs IFRS impacts. I scanned your paper in its entirety attempting to discern how any of the content aligns with any of the sections of the rubric. I am not able to make a connection. There are certain statements that could correspond to particular sections of the paper but the topic discussed in those sections does not relate. Note that you turned your paper in two days early and did not take my prior offer that you should make use of the tutors and coaches at the Online Writing Center who will review your work prior to submission and will work with students to elevate the work and offer support to advance students’ writing skills. I assure you that if you submitted your paper to the Online Writing Center and if they had access to the rubric and if they took note that your paper had no connection to the rubric, they would have offered you feedback to point you in the right direction. If you wish to redo this paper, please do so, please consult with the Online Writing Center, please add section headings, and feel free to resubmit when you have crafted a paper that addresses with proper focus and organization the specific sections that are stated in the rubric. When you have completed it, upload it and email me a notification and I will waive the late penalty. If you accept this offer, please do so within 10 days. Today’s date: 3/27/21. Ethical Violations: Responsibilities (External) 10 points Meets “Proficient” criteria and expands on the impact beyond immediate external stakeholders, encompassing the external environment 9 points Assesses the ethical responsibilities of professional accountants in relation to external stakeholders, including how the stakeholders were affected by the violations 7 points Assesses the ethical responsibilities of professional accountants in relation to external stakeholders and how the stakeholders were affected by the violations, but assessment is missing key participants or fails to adequately address the impacts to external stakeholders 0 points Does not assess the ethical responsibilities of professional accountants in relation to external stakeholders and how the stakeholders were affected by the violations Score of Ethical Violations: Responsibilities (External),0 / 10 Criterion Feedback Ref. Note 1. Ethical Violations: AICPA Codes (Independence) 5 points Meets “Proficient” criteria, and examination includes harm caused by independence violations 4.5 points Examines independence-type ethical violations (as defined by the AICPA Code) within the case and addresses the importance of independence in fact and appearance 3.5 points Examines independence-type ethical violations (as defined by the AICPA Code) within the case, but omits key independence violations or does not address the importance of independence in fact and appearance 0 points Does not examine independence-type ethical violations within the case Score of Ethical Violations: AICPA Codes (Independence),0 / 5 Criterion Feedback Ref. Note 1. Also see the respective week’s course announcement for additional guidance for this topic. Ethical Violations: AICPA Codes (Integrity) 10 points Meets “Proficient” criteria, and examination includes harm caused by integrity violations 9 points Examines ethical violations in regard to the integrity (as defined by the AICPA Code) of the main participants within the case 7 points Examines ethical violations in regard to the integrity (as defined by the AICPA Code) of the main participants within the case, but omits key integrity violations or examination lacks detail 0 points Does not examine ethical violations of the main participants within the case Score of Ethical Violations: AICPA Codes (Integrity),0 / 10 Criterion Feedback Ref. Note 1. Ethical Violations: AICPA Codes (Objectivity) 10 points Meets “Proficient” criteria, and examination includes specific examples illustrating objectivity or the lack thereof 9 points Examines the objectivity (as defined by the AICPA Code) of main stakeholders within the case, including a detailed analysis of the objectivity of the professional accountants 7 points Examines the objectivity (as defined by the AICPA Code) of main stakeholders within the case, but does not include a detailed analysis of the objectivity of the professional accountants, or overall examination is lacking in detail 0 points Does not examine the objectivity of main stakeholders within the case Score of Ethical Violations: AICPA Codes (Objectivity),0 / 10 Criterion Feedback Ref. Note 1. Ethical Violations: Implications (Legal) 10 points Meets “Proficient” criteria and expands the analysis beyond obvious legal implications 9 points Assesses legal implications of ethical violations on the business and accounting profession 7 points Assesses legal implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case 0 points Does not assess the legal implications of ethical violations on the business and accounting profession Score of Ethical Violations: Implications (Legal),0 / 10 Ethical Violations: Implications (Social) 10 points Meets “Proficient” criteria and expands assessment beyond obvious social implications 9 points Assesses social implications of ethical violations on the business and accounting profession 7 points Assesses social implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case 0 points Does not assess social implications of the violations on the business and accounting profession Score of Ethical Violations: Implications (Social),0 / 10 Criterion Feedback Ref. Note 1. Ethical Violations: Implications (Economic) 10 points Meets “Proficient” criteria and expands the analysis beyond direct economic impacts 9 points Assesses economic implications of ethical violations on the business and accounting profession 7 points Assesses economic implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case 0 points Does not assess economic implications of the violations on the business and accounting profession Score of Ethical Violations: Implications (Economic),0 / 10 Criterion Feedback Ref. Note 1. Ethical Violation: Code of Ethics 10 points Meets “Proficient” criteria and includes a discussion on how the company’s Code of Ethics could have been used to prevent the violations 9 points Determines if the ethical violations identified in the case violate components of the company’s own Code of Ethics and describes each violation in detail 7 points Determines if the ethical violations identified in the case violate components of the company’s own Code of Ethics, but does not adequately describe the violations or omits key violations 0 points Does not determine if the ethical violations identified in the case violate components of the company’s own Code of Ethics Score of Ethical Violation: Code of Ethics,0 / 10 Criterion Feedback Ref. Note 1. Articulation of Response 5 points Meets “Proficient” criteria and has excellent syntax and sentence construction 4.5 points Submission has no major errors related to citations, grammar, spelling, syntax, or organization 3.5 points Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas 0 points Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas Score of Articulation of Response,0 / 5 Criterion Feedback Ref. Note 1. Rubric Total ScoreTotal 9 / 100 Overall Score Overall Score Points earned out of 10091 points minimumThe overall submission earned 91 points or more. Final calculation of grades can be found in the gradebook. Points earned out of 10071 points minimumThe overall submission earned 71 points or more. Final calculation of grades can be found in the gradebook. Points earned out of 1001 point minimumThe overall submission earned 1 points or more. Final calculation of grades can be found in the gradebook. Points earned out of 1000 points minimumThe overall submission earned 0 points or more. Final calculation of grades can be found in the gradebook.
Need final project edited. Please see the attached. Each sub-heading needs to be addressed in detail. Thanks
Running head: CELADON GROUP, INC. FINANCIAL SCANDAL 0 Celadon Group, Inc. Financial Scandal Yvonne Saunders-Batchue Southern New Hampshire University Date Table of Content I. Background…………………………………………………………………………………….. 3 II. Ethical Violation……………………………………………………………………………….4 III. Theoretical Models……………………………………………………………………………8 IV. Influence and Standards……………………………………………………………………… 8 V. Ethical Framework……………………………………………………………………………..9 Celadon Group, Inc. Financial Scandal I. Background Celadon Group Inc. is a truckload freight transport provider. Through its subsidiary companies, the company provides long haul, regional, local, dedicated, intermodal, temperature-protect, and expedited freight services across the United States, Canada, and Mexico. Furthermore, the company offers freight brokerages, freight management as well as supply chain management solution. The services include logistics, warehousing, and distribution. The operating segments of the company are asset-based, asset-light, and equipment leasing and services. Celadon Group Inc, is headquartered in Indianapolis, Indiana, USA, and is one of the top ten largest trucking carriers trading at over-the-counter markets (OTCMKTS). According to Catarevas, (2019), celadon had Quality companies LLC as it owned a subsidiary that operated by leasing tractors and trailers to owner operator truck drivers. Between 2013 to 2016, Quality Companies LLC’s inventory grew to approximately 750 tractors and trucks to more than 11,000. In 2016, the subsidiary’s financial performance was hit by a slowdown in the trucking market (FreightWaves, 2019). The company owned a significant number of truck models with mechanical issues which many drivers did not want to lease. In the same year, Quality Companies trucks most of them were idle, not leased and overvalued and quality book by tens of million dollars. The company generated revenue from leasing its trucks and trailers but when demand was low the company could not generate profit as it used to. The financial scandal was reported when Quality Company and celadon participated in a scheme that led to falsely reporting inflated profit and an inflated asset to the investing public through a celadon financial statement. By June 2016 and October 2016, Quality Company engaged in a variety of activities that involved trading and disposing of its unused and aging trucks. The trades were made via invoices which allowed the company not to disclose the losses connected to the trucks and it allowed the executive to inflate the truck’s values above market value. Celadon uses these invoices as a scheme to hide the inflated truck values and millions of dollars of losses made for investors. Celadon admitted it had inflated over 1000 used trucks through a false transaction with a third party. The reason for selecting accounting fraud is to examine the unethical fraud made by Celadon. The company is accused of two accounts of fraud that is trying to massage book of accounts by falsifying books, records, and accounts of a public company and the other fraud activity include making a false statement to the public company accounts (FreightWaves, 2019). The consequence of restating the financial statement led to a stock crash which led to delisting the company from the New York stock exchange in April 2018. Now the company trade on the OTC. II. Ethical Violations Celadon Group Inc. was accused of complex securities and accounting fraud scheme that cost shareholders around $60 million and federal prosecution for accounting violation. The firm was accused of two accounts of fraud which include massaging financial statements to hide loss and overvalue the truck value and falsify books, records, and accounts of a public company. The celadon and the Quality Company LLC senior exchange orchestrated a securities and accounting fraud scheme that misled shareholders, banks, accountants, and the investing public (FreightWaves, 2019). Celadon and Quality Company had acquired hundreds of 2012 international Prostar Tracts with defective MaxxForce Engines. Those tractors lost their value because the drivers were unwilling to drive or lease them. The market value for the 2012 Prostar owned by quality was valued at $15,000 apiece but the company accounting record listed them as high as $60,000 apiece. Meek, Peavler and Williams, and other top executives of Celadon and Quality Company knew the real value of the substantial portion of Celadon trucks had declined significantly. Company executive instead of accounting for the decline in truck values the executive only devised a scheme to conceal millions of dollars in losses from Celadon shareholders, Bank, and Investigating public (FreightWaves, 2019). This ethical accounting practice was conducted after the Celadon executive traded hundreds of the older and unused trucks with Prostars for newer used trucks. The transaction was recorded as independent purchases and the invoices obtained after the sales purchase were all inflated to avoid scrutiny. In 2016, William stated that Celadon needed to sell $70,000 in excess to meet the records as indicates the company accounting record. Meek further claimed that if the truck were sold in less than its market value then the company would suffer losses (FreightWaves, 2019). As result, around 1000 trucks were traded at inflated prices and as a result, more than 600 tracks that were to be sold at a loss were hidden from shareholders. The purchases of the trucks were financed through a revolving line of credit from banks. The company was on verge of violating the bank covenant by September 2016 therefore Celadon asked the truck dealer to pay $25 million before the quarter ending on September 30, 2016. Celadon agreed to pay back the money to the truck dealer with a similar amount three days after the quarter ends. Despite having such an agreement Celadon’s quarterly financial statement did not reflect the secrete arrangement with the truck dealer and the money acquired from the banks was used to pay down part of its debts owed to its banks before the close of the quarter (FreightWaves, 2019). According to International Financial Reporting Standards (IFRS) on the cost model, an asset, an item of property, plant, and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses. According to IFRS standards, the asset should be depreciated at least each year-end and dealt with change in estimate. Furthermore, the revaluation model applied should be done with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using the value at end of the reporting period. Celadon did not use a valuation model that was aligned with regularity and also failed to depreciate the machines based on fair market value. The executive scheme to report the assets at higher market value to hide losses indicated that the company violated IFRS compliant standards. Furthermore, the internal auditors are guided by a code of ethics that stipulates the governing behavior of individuals and organizations in conducting internal auditing. The internal auditors are supposed to perform their work with honesty, diligence, and responsibility and shall observe the law and make disclosure expected by the law (Mashayekhi, & Yazdanian, 2018). The internal auditor shall perform internal audit services following the international standard of professional practice of internal auditing. According to the accounting fraud, the internal auditors failed to follow the right accounting standards to record material facts and any transaction and agreement. The internal auditors were supposed to provide an independent, objective, and constructive view of the company’s financial performance but the internal control bend to executive wishes to committed organizational fraud. The external or independent auditors began to question the truck trades in later 2016 and early 2017. In responding to independent auditors, the Celadon executive made a false and misleading statement about the nature of the truck’s trades and failed to reveal agreement. Celadon management had approved a memorandum that falsely stated that the trucks involved were purchased and sold at fair market value and those transactions were as well accounted for in the right way contrary to the truth (FreightWaves, 2019). Quality and Celadon management even represented to the auditors that the transactions were done at fair market value. They claimed that those transactions were not trades. Lack of transparency and intent to hide the information was also experienced when Peavler one of the Company executives directed other senior executives to delete emails after the auditors requested the relevant document. This act shows the extent the executive were willing to go to conceal information about transactions and secrets behind those transactions. The independent auditors after failing to secure the right information that could help to give the right opinion regarding the statement they decided to withdraw theirs opinion on Celadon financial statements (FreightWaves, 2019). The external auditor’s disclosure led to a significant drop in the price of celadon stock where investors lost millions of dollars. The company faced several expenses that included paying shareholders around $44.2 million in restitution. The company was required to pay this amount after the stock clash and when the company revealed that the financial statement for the physical year 2016 reported in May 2017 was not reliable as well as the independent report from the auditors (Al-Mulsim, 2019). Meek, Peavler were both arrested and charged with accounting fraud but were later released on bail. Their action at Celadon that involves a scheme of lies, fraud, and misrepresentation significantly damaged Celadon’s integrity of the market and its shareholders. Furthermore, the company had to reach a $7.5 million settlement with U.S Securities and Exchange Commission (SEC) that prohibited the carriers from violating certain sec regulations (Al-Mulsim, 2019). III. Theoretical Models The theoretical model that can be used to explain the behavior committed by the Celadon and Quality Company LLC executive include deontology theory. Deontology theory stated that people should always act morally following a certain set of principles and rules regardless of the outcome (Misselbrook, 2013). These theory advocates for the truth or doing the right thing because wrong acts violate rules of laws and those acts are usually judged independently of their outcome. Some wrong acts may yield a favorable outcome an outcome that may be achieved out of deceit. For example, the company can massage financial statement to look appealing so that the company stock performance improve allowing shareholder make significant gain in short-term but at long-term, the shareholder will incur losses. According to Kant, the motivation behind an action must always be based on obligation and well thought before an action takes place. Deontology is a rule-based theory that claims that humans can reason which enables people to know their obligation towards one another. Virtue ethical theory can be used to judge a person by his character rather than his action that might deviate from his or her normal behavior (Annas, 2018). A person moral is influenced by his reputation and motivation for one to engage on account when rating an unusual and irregular behavior that is considered unethical. IV. Influences and Standards Celadon and Quality company LLC accounting fraud influenced standard set for recognizing cost for the tangible asset and valuation. Trucks are tangible assets after each financial year whether in use or not in use the trucks will incur depreciation. The equipment needs to be evaluated each year to estimate the market value of the truck. The market value is the fair value of the trucks. Celadon violated accounting and reporting for property, plant, and equipment (PP&E) which is IAS16 and IFRS 13. Celadon instead of valuing the trucks with their true market value after accounting for depreciation expenses for the year the machine was acquired, the company inflated the value of that machine so that the value of that machine would look more valuable as one way of hiding its losses. According to ISA 24.16 and IFRS 12 on the relationship between parents and subsidiaries require transaction between parent and subsidiary to be disclosed and the senior parents executive that participate must also be disclosed (Beerbaum, & Piechocki, 2017). Celadon despite having a transaction with Quality Company LLC the information about the transaction was not revealed or disclosed and that affected the set standard on disclosure rules. Celadon’s financial statement violated the IFRS 1 standards that require all firms using IFRS accounting standards to comply with IFRS reporting policies (Kieso, Weygandt, & Warfield, 2020). Celadon instead of following IFRS reporting policies by preparing financial statements according to IFR standards and show a high level of objectivity, integrity, and competence it chooses to conceal important information to stakeholders. V. Ethical Framework Deontology state that some people action may turn out to be wrong even when the action leads to an admirable outcome. The actions according to deontology are always judged independently of the outcome. Celadon and Quality Company’s executive actions were wrong because they resulted in a favorable outcome which is short-term and long-term effects on shareholders. The executive collided with internal auditors to massage the book of accounts, conceal information about the transaction, and even deceived external auditors with truck transaction true value. The action violated IFRS, ISA standards on equipment, plant and land valuation, reporting, and disclosure on the relationship of parent company and subsidiary. Furthermore, the executive action violated the Sarbanes-Oxley Act (SOX) that was enacted with the intent of promoting accuracy and reliability of corporate disclosure in a financial statement. Executive actions we wrong and did not yield any benefit to the company or shareholders as they led to tarnishing the company brand image, loss of market value, and stock clashes. The company had to compensate shareholders and pay U.S Securities and Exchange Commission for violating its rules. The three executive behavior and character can be assessed with virtue ethical theory whereby Peavler’s ethical character was put into test. He was the one that directed other executives to delete emails from independent auditors meaning that he was ready to go to any extend to violate accounting standards. To prevent a similar incidence of ethical violations, new company executives should always do what is right by abiding by the standards, laws, and ethical code developed to guide internal auditors, asset valuation, and reporting. As well, the company executive should be ready to follow IFRS on disclosure rules. The company executive should find a way of ensuring there are right corporate governance and positive corporate culture to prevent similar unethical issues from being repeated. A proper code of conduct should be developed that would guide the internal auditors, executives, and employees. That ethical code of conduct should be implemented in the company as a policy of promoting transparency, integrity, competency, follow rule of law. References Al-Mulsim, A.(2019, April 25). Celadon Agrees to Pay $42.2 Million to Settle Accounting Fraud Claims: The Wall Street Journal: Retrieved from https://www.wsj.com/articles/celadon-agrees-to-pay-42-2-million-to-settle-accounting-fraud-claims-11556213014 Annas, J. (2018). 1. Virtue Ethics: What Kind of Naturalism?. In Virtue ethics, old and new (pp. 11-29). Cornell University Press. Beerbaum, D., & Piechocki, M. (2017). Related Party Transactions–Empirical Study based on IFRS and SEC Disclosures. Maciej, Related Party Transactions–Empirical Study based on IFRS and SEC Disclosures (September 12, 2017). Catarevas, M.(2019, April 25).Celadon to pay $42 million for accounting fraud. Fleet Owner: Retrieved from https://www.fleetowner.com/news/article/21703751/celadon-to-pay-42-million-for-accounting-fraud FreightWaves, (2019, Dec. 6). Two Former Celadon Executives Charged With Securities Fraud. Finance.Yahoo: retrieved from https://finance.yahoo.com/news/two-former-celadon-executives-charged-135817448.html Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2020). Intermediate accounting IFRS. John Wiley & Sons. Mashayekhi, B., & Yazdanian, A. (2018). A Survey on Key Components of Internal Audit. Accounting and Auditing Review, 25(1), 135-158. Misselbrook, D. (2013). Duty, Kant, and deontology. British Journal of General Practice, 63(609), 211-211.
Need final project edited. Please see the attached. Each sub-heading needs to be addressed in detail. Thanks
ACC 696 Final Project Guidelines and Rubric The final project for this course is a case study in which students will select a recent real -world accounting ethics case from the last 5 years, involving earnings mismanagement, fraud, poor internal controls, or poor corporate governance. From the perspective of an accounting professional, each student will analyze responsibilities to stakeholders while considering theoretical models of ethical behavior, the AICPA Code of Professional Con duct, emerging technol ogies, regulatory activities, and (if applicable) international accounting standards. Overview Unfortunately, there is no shortage of examples of unethical situations and ethics violations within corporations. Some cases produce wide -ranging and devastating effects on all part ies involved. Whether it is reduced investor confidence, reductions in a company’s credit rating, or even bankruptcy, these situation s are important to analyze in order to determin e effecti ve strategy for avoiding ethical obstacles in the future. You are encouraged to put yourself in the place of both the involved employees as well as the stakeholders . You are encouraged to select a significant case that is personally interesting and/or relevant to you professionally . This assessment will evaluate your mastery with respect to the following course outcomes:  Analyze legal, social, and economic developments for their defining role in ethical expectations of the business and accounti ng pro fession  Assess the ethical responsibilities of professional accountants to internal and external stakeholders relating to the financi al reporting process  Apply theoretical models of ethical behavior to contemporary accounting issues  Evaluate emerging tech nologies, regulatory activities, and international accounting standard setting for their impact on the ethical behavior of accounting professionals  Develop an ethical framework for setting appropriate standards of conduct for stakeholders in the accounting proce ss Prompt Your case study should answer the following prompt: What ethical framework should be u tilized when setting appropriate standards of conduct for professional accountants in order to promote ethical values and decision making? Specifically, the following critical elements must be addressed: I. Background What company is the subject of the case? Why did you choose this company/ethical situation? What ethics violations were discovered? II. Ethic al Violations a) Who were the main participants involved in perpetrating the violations? Discuss the ethical responsibilities of professional accountants to the following stakeholders regard ing the financial reporting process. How were the stakeholders affected by the ethics violations? i. Int ernal ii. External b) What AICPA Codes of Professional Conduct were violated? i. What is the importance of independence , when is independence required, and why must you be independent both in fact and in appearance ? ii. Did the main participants adhere to moral and ethical principles ? Soundness of moral character ? Honesty? In other words, discuss the case as it relates to the integrity of the main participants. iii. Did the main stakeholders, including the professional accountants , maintain their objectiv ity ? Explain. c) What were the implications of these violations on the business and accounting profession from the following perspectives? i. Legal ii. Social iii. Economic d) Does the company have a specific code of ethics ? Were any of the components of the code violated? Discuss. III. Theoretical Models a) What ethical models were violated in this case? Provide detailed rationale to support your claim . b) How could ethical models have been used to produce better decisions and outcomes? In other words, c ompare and contrast ethical models for their potential contri butions to better decision -making. IV. External Influences and International Accounting Standard s a) What impact, if any, do regulatory activities have on the ethics of this case? If not applicable to this case, discuss possible overall impacts of regulatory activities for ethical situations in general. b) What impact s, if any, do international accounting standards have on the ethics of this case? If not applicable to this case, discuss possible overall impacts of international accounting standards for ethical situations in general. c) What impacts, if any, do emerging technologies have on the ethics of this case? If not applicable to this case, discuss possible overall impacts on ethical situations in general. V. Ethical Framework a) Propose an ethical framework for setting appropriate standards of conduct for professional accountants producing a higher level of et hical values and decision making, as they relate to this case. The framework should include the ways in which management wi ll be involved in the process and what company resources should be available to employees to help make them more ethical choices. b) Could internal controls have been utilized to produce more ethical behavior? Would a plan by corporate governance be an appropriate vehicle for delivering these internal controls to encourage ethical behavior? Discuss. Milestones Milestone One : Background and Ethical Violations In Module Four , you will submit the first draft of Section I: Background and Section II: Ethi cal Violations of the final project. You will submit this draft to the instructor for feedback, which you will incorporate into the final version of the final project. This milestone is graded with the Milestone One Rubric. Milestone Two : Theoretical Mode ls and External Influences and International Accounting Standards In Module Seven , you will submit the first draft of Sections III and IV of the final project. You will submit this draft to the instructor f or feedback, which you will incorporate into the final version of the final project. This milestone is graded with the Milestone Two Rubric. Final Submission : Ethics Case Study In Module Nine , you will i ncorporate your instructor’s feedback from Milestones One and Two. Submit your completed final draft of the ethics case study, including Section V, Ethical F ramework . This submission is graded with the Final Project Rubric. Final Project Rubric Guidelines for Subm ission: Students should submit a well -developed analysis of the ethical framework utilized when setting appropriate standards of conduct for professional accountants in order to promote ethical values and decision making. The paper should be 12 –15 pages long and include a minimum of 8 references, which should be peer -reviewed scholarly research. Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Background Meets “P roficient” criteria and expands on the background and ethical violations using a variety of supporting research Describe s the situational background of the case including a brief descri ption of the ethical violations Describes the situational background of the case , but omits key ele ments and/or ethical violations Does not describe the situational background of the case or does not provide a brief descri ption of the ethical violations 5 Ethical Violations: Responsibilities (Internal) Meets “Proficient” criteria and expands on the impact beyond immediate internal stakeholders, encompassing the internal environment Assesses the ethical responsibilities of professional accountants in relation to internal stakeholders, including how the stakeholders were affected by the violations Assesses th e ethical responsibilities of professional accountants in relation to internal stakeholders and how the stakeholders were affected by the violations, but assessment is missing key participants or fails to adequately address the impacts to internal stakehol ders Does not assess the ethical responsibilities of professional accountants in relation to internal stakeholders and how the stakeholders were affected by the violations 5 Ethical Violations: Responsibilities (External) Meets “Proficient” criteria and expands on the impact beyond immediate external stakeholders, encompassing the external environment Assesses the ethical responsibilities of professional accountants in relation to external stakeholders, including how the stakeholders were affected by the violations Assesses the ethical responsibilities of professional accountants in relation to external stakeholders and how the stakeholders were affected by the violations, but assessment is missing key participants or fails to adequately address the im pacts to external stakeholders Does not assess the ethical responsibilities of professional accountants in relation to external stakeholders and how the stakeholders were affected by the violations 5 Ethical Violations: AICPA Codes (Independence) Meets “Proficient” criteria , and examination includes harm caused by independence violations Examines independence -type ethical violations (as defined by the AICPA Code ) within the case and addresses the importance of independence in fact and appearance Examines independence -type ethical violations (as defined by the AICPA Code) within the case , but omits key independence violations or does not address the importance of independence in fact and appearance Does not examine independence -type ethical violations within the case 3 Ethical Violations: AICPA Codes (Integrity) Meets “Proficient” criteria , and examination includes harm caused by integrity violations Examines ethical violations in regard to the integrity (as defined by the AICPA Code) of the main participants within the case Examines ethical violations in regard to the integrity (as defined by the AICPA Code) of the main participants within the case, but omits key integrity violations or examination lacks detail Does not examine ethica l violations of the main participants within the case 3 Ethical Violations: AICPA Codes (Objectivity) Meets “Proficient” criteria , and examination includes specific examples illustrating objectivity or the lack thereof Examines the objectivity (as defined by the AICPA Code) of main stakeholders within the case , inclu ding a detailed analysis of the objectivity of the professional accountants Examines the objectivity (as defined by the AICPA Code) of main stakeholders within the case, but does no t include a detailed analysis of the objectivity of the professional accountants , or overall examination is lacking in detail Does not examine the objectivity of main stakeholders within the case 3 Ethical Violations: Implications (Legal) Meets “Proficient” criteria and expands the analysis beyond obvious legal implications Assess es legal implications of ethical violations on the business and accounting profession Assesses legal implications of ethical violations on the business and account ing profession, but analysis omits key implications or fails to relate the implications directly to the case Does not assess the legal implications of ethical violations on the business and accounting profession 4 Ethical Violations: Implications (Social) Meets “Proficient” criteria and expands assessment beyond obvious social implications Assess es social implications of ethical violations on the business and accounting profession Assesses social implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case Does not assess social implications of the violations on the business and accounting profession 4 Ethical Violations: Implications (Economic ) Meets “Proficient” criteria and expand s the analysis beyond direct economic impact s Assess es economic implications of ethical violations on the business and accounting profession Assesses economic implications of ethical violations on the business and accounting profession, but analysis omits key implications or fails to relate the implications directly to the case Does not assess economic implications of the violations on the business and accounting profession 4 Ethical Violation: Code of Ethics Meets “Proficient” criteria and includ es a discuss ion on how the company’s Code of Ethics could have been used to prevent the violations Determines if the ethical violations identified in the case violate components of the company ’s own Code of Ethics and d escribes each violation in detail Determines if the ethical violations identified in the case violate components of the company ’s own Code of Ethics , but does not adequately describe the violations or o mits key violations Does not determine if the ethical violations identified in the case violate components of the company ’s own Code of Ethics 5 Theoretical Models: Violated Meets “Proficient” criteria and uses scholarly research in justification of selected model Applies theoretical models to the chosen case to determine which model was violated and provides justification of claim Applies theoretical models to the chosen case to determine which model was violated, but does not provide adequate justification of claim or om its key models in application to the case Does not apply theoretical models to the chosen case 8 Theoretical Models: Better Decisions Meets “Proficient” criteria and determines which models would be the most effective to the ethics in this case Compares and contrasts applicable theoretical models for the ways they could have contributed to better decisions Compares and contrasts theoretical models for the ways they could have contributed to better decisions , but does not utilize applicable models , or discussion is lacking in detail Does not compare and contrast theoretical models for the ways they could have contributed to better decisions 5 Influences and Standards : Regulatory Activities Meets “Proficient” criteria and relate s the impact s of regulations to the overall ethical environment Evaluates the impact of regulatory activities on the ethics in this case or, if not applicable to this case, the overall impact on ethical situations in general Evaluates the impact of regulatory activitie s on the ethics of the case or in general , but o mits key relevant regulatory activities or fails to apply them directly to the case Does not evaluate the impact of regulatory activ ities on ethical situations 4 Influences and Standards: International Accounting Standards Meets “Proficient” criteria , including both research and examples. Evaluates the impact that international accounting standards have on the ethical environment, in cluding the impact on this case Evaluates the impact of international accounting standards on the ethics in this case or explains why internation al standards were not considered Evaluates the impact of international accounting standards on the ethics in the case or explain s why international standards were not considered, bu t evaluation misses key impacts , fails to apply them directly to the case , or explanation of why international standards were not considered is not adequately detailed Does not evaluate the impact of international accounting standards on the ethics of this case or explain why international standards were not considered 4 Influences and Standards: Emerging Technologies Meets “Proficient” criteria and uses examples to draw connect ion s between technology and ethics Analyzes the impact of emerging technology on ethical violations within the case or, or if not applicable to this case, the overall impact on ethical situations in general Analyzes the impact of emerging technology on the ethical violations within the case or the overall impact on ethical situation s in general, but analysis misses key impacts or analysis is lacking in detail Does not analyze the impact of emerging technology on the ethical violations 5 Ethical Framework: Proposal Meets “Proficient” criteria , and the framework is comprehensive and multi -dimensional Proposes an ethical framework for setting appropriate standards of conduct , including management’s involvement and suggested employee resources Proposes an ethical framework for setting appropriate standards of conduct, but framework is not fully developed or is missing key elements , such as management’s involvement or suggested employee resources Does not propose an ethical framework for setting appropriate standards of conduct 12 Ethical Framework: Internal Controls Meets “Proficient” criteria , and evaluation considers this case as well as other environment s Evaluates the promotion of ethical behaviors through the use of internal controls , including corporate governance Evaluates the promotion of ethical behaviors through the use of internal controls, but evaluation does not include corporate governance or discussion is lacking in detail Does not evaluate the promotion of ethical behaviors through the use of internal controls 10 Articulation of Response Meets “Proficient” criteria and has excellent s yntax and sentence construction Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 11 Earned Total 100%
Need final project edited. Please see the attached. Each sub-heading needs to be addressed in detail. Thanks
Running head: ACC 696 FINAL PROJECT MILESTONE 1 1 Project Deliverables: Milestone 1: Background and Ethical Violations Teisha N, Blonvia Southern New Hampshire University Author Note Teisha N. Blonvia, Accounting Student, Southern New Hampshire University. Correspondence concerning this document should be addressed to Teisha N. Blonvia, Accounting Student, Southern New Hampshire University, E-mail: [email protected]. 2 Background In December of 2019 Robert Karmann, Joseph Bayliss, and Ronald Roach were charged by the Securities Exchange Commission for their roles in a scheme that robbed shareholders of approximately 900 million dollars. [ CITATION Sec19 l 1033 ] The CFO, Robert Karmann was accused of shifting money to create revenue and providing reporting to internal and external users with falsified information. [ CITATION Sec19 l 1033 ] Joseph Bayliss was accused of knowingly providing certifications of inspection for generators that were either non-existent or never inspected. [ CITATION Sec19 l 1033 ] Ronald Roach was accused of providing financial statements and reporting that falsely reported large amounts of revenue earned from false leases. [ CITATION Sec19 l 1033 ] The SEC ultimately charged Robert Karmann with “violating the antifraud provisions of Section 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, as well as Rules 10b-5(a) and (c) thereunder, and seeks injunctive relief, disgorgement, and civil penalties”. [ CITATION Sec19 l 1033 ] The SEC found Joseph Bayliss and Ronal d Roach guilty of the same crime as well and rendered the same punishments for now as far as injunctions and monetary remuneration. [ CITATION Sec19 l 1033 ] However, the SEC is continuing to investigate this case and the actions of the individuals charged. [ CITATION Sec19 l 1033 ] Some several codes and guidelines come to mind when I think about this case that was not followed by the three defendants in this case, but I think the most notable would be the AICPA Code of Professional Conduct. This code consists of two parts; the articles and the rules to the articles and although this was created with the intent to be for Accountants and professionals in that field; it has a very strong ethical tone that I think can be applied to any profession. [ CITATION AIC14 l 1033 ] There are six articles and they are Scope and Nature of Services, 3 Due Care, Objectivity ad Independence, Integrity, The Public Interest, and Responsibilities. The rules guide how to execute the articles and this is where there would be some specification that is just for the Accounting profession but on general, things such as responsibilities, due care, integrity, objectivity, and the public interest can be very applicable to the general ethics of other professions. [ CITATION AIC14 l 1033 ] Ethical Violations: Responsibilities (Internal) Article I of the AICPA code states, “In carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgments in all their activities”. [ CITATION AIC14 l 1033 ] This means that professionals have the obligation to do their job objectively and to the best of their ability. In this case, the accounting professionals that acted unethically were Robert Karmann CFO and Ronald Roach CPA. [ CITATION Sec19 l 1033 ] They both have a responsibility to provide financial statements and reports that presented a fair representation of the company’s financial position. In this cas e, that means that they had a duty to provide reporting that reported revenue that was earned. The internal effect of reporting false income caused an overstatement of the company’s revenue, which caused other issues such as improper taxes being paid and false s. Ethical Violations: Responsibilities (External Externally the unethical behavior by Ronald Roach and Robert Karmann had lasting effects on the shareholders. The most prevalent effect was the monetary loss suffered by shareholders for over 900 million dollars over several years. [ CITATION Sec19 l 1033 ] This 4 monetary loss more than likely caused a domino effect of losses in the shareholder business affairs in addition to their personal lives. This behavior caused related tax issues for the shareholders as well because they were expecting huge tax breaks and did not receive them. [ CITATION Sec19 l 1033 ] Ethical Violations: AICPA Codes (Independence) Article number IV of the AICPA Code of Professional Conduct references objectivity and independence. [ CITATION AIC14 l 1033 ] As it relates t independence the code says that the professional should remain independent in fact and appearance. [ CITATION AIC14 l 1033 ] This goes hand in hand with objectivity because the professional should always view things objectively and base opinions on facts only. It is important to maintain independence in appearance because the credibility of accounting professionals could be easily challenged if it appeared that the professional was not independent of th e client. The appearance of independence is often hard to maintain so maintaining the objectivity while providing the services makes up for this. The Accounting professional must be scrupulous in their application of generally accepted accounting principles and candid in all their dealings. [ CITATION AIC14 l 1033 ] For an Accounting professional to be independent in facts ensures that the information properly reviewed and tested. This is important because when providing audit services or any other attestation services the professional is signing off that they verified the information they were furnished. [ CITATION Wol15 l 1033 ] In this case, Robert Karmann and R onald Roach did not remain objective cause they did not consider the outcomes and effects of their actions before taking them. They did not even consider this during the unethical behavior because the scheme took place over several years. They were able to maintain the appearance of 5 independence but were not independent in fact. Here publishing of false revenue numbers as sifting of fund proves that no one verified any actual information that was given to them. This is also supported by the fact that Robert Karmann w charges with the moving of funds to create the appearance of revenue. [ CITATION Sec19 l 1033 ] If they are making up the numbers, then they’re not reviewing any numbers. Ethical Violations: AICPA Codes (Integrity) Article III of the AICPA code says that the professional should do their job with the highest degree of integrity to maintain the public’s confidence. [ CITATION AIC14 l 1033 ] For a person to have integrity, it shows as a part of who they are. It requires them to be honest, trustworthy, and morally sound. [ CITATION AIC14 l 1033 ] In this case, the defendants were not honest with themselves or the shareholders. They were not moral in their decision making either because they would not have betrayed the trust of the shareholders and committed these crimes. The fact that the defendants lied to the public and stole money from the shareholders by creating fictitious revenue and investment items proves that they were unable to make the decision that was for the good of the shareholder in the absence of guidance. Integrity is measured in terms of what is right in the absence of specifications on how to proceed. [ CITATION AIC14 l 1033 ] Ethical Violations: AICPA Codes (Objectivity) Article IV of the AICPA code covers objectivity and what it says is that objectivity is a state of mind and it adds value to the services that the professional performs. [ CITATION AIC14 l 1033 ] In this case, the accused could have taken some steps to be objective and keep 6 the best interest of the shareholders in mind. The AICPA code lays out a four-step process that is easy for any professional to follow. [ CITATION Bec19 l 1033 ] 1. Detect/uncover the problem(s) 2. Evaluate the significance of the threats 3. Identify, evaluate, and apply precautions 4. Document and share with necessary parties If the accused had taken these steps to make ethical decisions. The shareholder deceit would not have taken place. The accused in this case lack integrity as a key component to their character so therefore they were able to deceive shareholders with no regard for any potential wrongdoing. Ethical Violations: Implications (Legal) From a business perspective, the defendants broke several state and federal laws. A couple of big ones are a breach of contract, common law fraud and deceit, and required state of mind. The breach of contract means that the defendants did not hold up their end of a deal made with the shareholders. [ CITATION Cop02 l 1033 ] The defendants broke the common law fraud and deceit law by lying to the shareholders when shareholders asked questions about the tax breaks that they were supposed to receive. Essentially, they told more lies to cover up the original lies. Under the common law fraud and deceit law, “the plaintiff must show the director or officer made false representations under circumstances that entitled him to rely on them, and that as a result of the reliance he suffered damages”. [ CITATION Cop02 l 1033 ] The required state of mind law says “someone is liable under Rule 10(b)-5 only if he acted with intent to 7 deceive, manipulate, or defraud”. [ CITATION Cop02 l 1033 ] It is clear in this case that the defendants acted with malice and an intent to defraud the shareholders. From an Accounting standpoint, there were also several laws and/or acts violated. For starters, there were no GAAP rules followed at all when it came to the preparation of financial reports ad the accounting process because the revenue was fictitious, and the reports were developed to support the false revenue. [ CITATION EY18 l 1033 ] In addition to the SEC charged the defendants with violating the anti-fraud provisions related to the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 as a result of their overall deceit of the shareholders. [ CITATION Sec19 l 1033 ] Ethical Violations: Implications (Social) Socially The company and the defendants have been lost the public’s trust. The public has no reason to believe that these people or any company they are associated with can practice good business in an integral manner. Analyst Jeff Windau of Edward Jones once said it will be a cloud that overhangs the company until things get better. [ CITATION Mat18 l 1033 ] Ultimately this behavior would lead to a significant decrease in the number of stakeholders at the company and deter new ones from choosing to have a stake in the company. [ CITATION Mat18 l 1033 ] If a company cannot produce revenue to exist, then it doesn’t exist. From an accounting standpoint, the results are the same. For Robert Karmann and Ronald Roach; they will be barred from practicing Accounting of any kind. [ CITATION Cop02 l 1033 ] This is a common practice for this type of crime that is committed and it suitable because they had no regard for the shareholders or the laws that protect the shareholder and the profession. 8 Ethical Violations: Implications (Economic) As a result of these crimes from a business standpoint, the economy will suffer due to the loss of revenue and products that flow in and out of the market and are meant to serve the greater good of the people. Likely, the company will never recover from the hard-hit to its goodwill (reputation). [ CITATION Jim19 l 1033 ] From an accounting standpoint, the economy will recover. Unfortunately, the defendants committed such crimes but by making them pay for their action the shareholder ill be made whole. In addition to this, we as a community learn from the mistakes of bad people and our Accounting guidelines are constantly strengthened and reviewed improvement. The poor choices of the “bad apples” are why we have such stringent Accounting laws to this day such as the Sarbanes-Oxley Act of 2002. [CITATION Cla17 l 1033 ] Ethical Violation: Code of Ethics This is a fairly new SEC case so at this time the companies that Robert Karmann and Ronald Roach controlled are not being specifically mentioned but they would have been expected to follow the AICPA Code of Professional Conduct and at the least general Code of Ethics. A strong Code of Ethics will contain some moral values that everyone n the company can adhere to and that will b benefit everyone and not compromise anyone. A good Code of Ethics can very easily be a way of life at the business who employs it and it should be required by all 9 employees to live by it. Neither Ronald Roach nor Robert Karmann illustrated any type of adherence to any Code of Ethics. They were only interested in gaining monetary wealth for themselves. References AICPA. (2014). Code of Professional Conduct. AICPA. Retrieved February 10, 2020, from https://www.aicpa.org/content/dam/aicpa/research/standards/codeofconduct/downloadabl edocuments/2014december14codeofprofessionalconduct.pdf Beckett-Ference, CPA, S. (2019, November 1). A framework for maintaining ethics compliance. Journal of Accountancy . Retrieved February 14, 2020, from https://www.journalofaccountancy.com/issues/2019/nov/cpa-ethics-compliance- framework.html Chappelow, Jim. (2019, June 13). Investopedia . Retrieved June 27, 2019, from investopedia.com: https://www.investopedia.com/terms/l/law-of-supply-demand.asp Clay, C., & Daniel, K. (2017, September 25). Accounting Today-4Sarbanes-Oxley marks 15 years of successes and challenges | Accounting Today . Retrieved October 9, 2018, from www.accountingtoday.com: 10 file:///C:/Users/thomp/AppData/Local/Packages/microsoft.windowscommunicationsapps _8wekyb3d8bbwe/LocalState/Files/S0/39/sarbanes-oxley-marks-15[87].pdf Coppolo, G., & Gelb, J. (2002). CIVIL AND CRIMINAL LIABILITY OF CORPORATE OFFICERS AND DIRECTORS. cga.ct.gov. Retrieved February 14, 2020, from https://www.cga.ct.gov/2002/rpt/2002-R-0704.htm Egan, M. (2018, October 30 ). CNN . (M. Egan, Editor, & CNN ) Retrieved June 26, 2019, from CNNBusiness.com https://www.cnn.com/2018/10/30/business/ge-investigation-justice- sec/index.html EY. (2018). US GAAP versus IFRS (The basics). PDF. Retrieved February 7, 2019, from file:///C:/Users/thomp/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bb we/TempState/Downloads/ifrsbasics_00901-181us_23february2018%20(1).pdf Securities Exchange Commission. (2019, December 17). SEC.gov . Retrieved February 10, 2020, from Securities Exchange Commission: https://www.sec.gov/litigation/litreleases/2019/lr24692.htm Wolfe, J. (2015, June 1). Due diligence with CPA firm subcontractors. Journal of Accountancy . Retrieved January 27, 2019`, from https://www.journalofaccountancy.com/issues/2015/jun/subcontractor-due-diligence.html