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CPAs who work for companies or as business consultants may encounter a number of ethical dilemmas within the work environment. This is especially true when they work in a state that follows at-will employment. In these states, an employer can fire a worker at any time without needing to state a reason. Employers who are unethical might try to use the threat of firing to get a CPA to make a finding or accounting calculation that is unethical.
An employer might urge his CPA to fudge the numbers on a revenue statement in order to make it look like the company made more money than it actually did. For example, she might be asked to record a sale at its full invoice price instead of including information about a return policy or a reduced price. She may be tempted to do this if her job is on the line. But if a CPA makes the misstatement and is discovered, she could face discipline by the state where she is working or may even lose her CPA license.
Working with Family
When a CPA works with family or someone he has a close relationship to, he puts himself at risk of a number of ethical dilemmas, such as being too sympathetic to the family member's problems. These are officially called "familiarity threats" by the American Institute of CPAs. An example would be if his brother is the in-house attorney for the same company the CPA works for, and advises him wrongly on legal matters. The AICPA recommends applying safeguards for these situations, such as having the family member moved to a department that doesn't overlap with his work or asking for an independent peer review of the CPA's findings.
Conflict of Interest
A CPA is at risk of having an ethical conflict of interest if she provides audits for a company whose financial outcome will directly benefit her. This can get a little convoluted. One example would be a CPA firm that audits a bank's financial statements, but also sells services for the bank. If the bank has a poor financial statement released to the public, then the CPA firm might not be able to sell as many services. In those cases, the CPA might need to limit or remove herself from financial auditing altogether since she can't provide an independent review.
Sometimes the CPA's ethical dilemma doesn't involve the mechanics of the financial audit. For example, one CPA whose client was elderly began to suspect that his client was the victim of elder abuse. However, some of his suspicions arose from working with his client on confidential matters. He wasn't sure how to report his concerns without also violating confidentiality rules. In situations like this, the CPA might need to involve an attorney to figure out exactly how he can resolve the situation.