In a written response, answer the following questions each
between 260 to 350 words from Ethics in Accounting: A
Decision-Making Approach.
Chapter 11, Exercise 2
You have been retained to testify as a damages expert at a
binding arbitration about the financial loss your client sustained
when a supplier shipped it defective raw materials. Several days
before the arbitration proceeding, you discovered that the
arbitrator is a member of your country club who occasionally plays
golf with you. Do you have a conflict of interest in testifying
under oath on behalf of your client? Should you discuss this case
with the arbitrator if you see him at the country club? Does the
arbitrator have a conflict of interest?
Chapter 11, Exercise 10
A CPA firm has been retained by a major corporation to analyze
whether its bank overcharged it interest on a bank loan, in
violation of Oregon usury laws that establish maximum interest
rates. This same CPA firm has been retained by an Arkansas bank
that has been accused by Arkansas state regulators of charging
excessive interest on consumer loans. Does the CPA firm definitely
have a conflict of interest?
Chapter 11, Exercise 29
Huang started a small CPA firm several decades ago when he
immigrated to the United States. Now, he is the managing partner of
the firm, which has grown to have 40 partners and over 90
professional staff members. One of Huang’s clients is Taiwan
Western Bank, located in northern California. Many of Huang’s small
business clients maintain their checking accounts there. Also,
Huang has always had a good working relationship with executives at
that bank. Many of the bank’s loan officers find Huang to be
trustworthy, and some even call him “charming.” Because of his
personal goodwill, Huang can often get his clients’ loan
applications approved faster there than at other banks. Huang has
been asked to serve on the bank’s Board of Directors. He has been
assured that the Board meets only one night each month and that
this position will not interfere with his duties as managing
partner of his CPA firm. Huang has asked you to weigh the “pros and
cons” for him of accepting the director position at the bank. What
are your thoughts?
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