An Instructional Case in the Ethics of the CPA/Client Relationship: The Roadrunner and Howard Bean, CPA

Research on Professional Responsibility and Ethics in Accounting (Formerly Research on Accounting Ethics), Vol. 10, pp. 221-229, 2005

22 Pages Posted: 9 Dec 2012

See all articles by Lawrence Webb

Lawrence Webb

RMIT University - School of Accounting and Law

Brendan T. O'Connell

RMIT University - School of Accounting and Law

Chris Carr

California Polytechnic State University, San Luis Obispo

Mark M. Higgins

University of Rhode Island - College of Business Administration

Date Written: 2003

Abstract

This instructional case examines the relationship between a CPA and his client. The case is suitable for use with upper-level accounting majors (juniors or seniors) as many of these students are likely to enter public practice and therefore are likely to be exposed to some of the ethical dilemmas address in this case. As such, the case could be included as a capstone to an advanced accounting course or used in an auditing course to emphasize accountants' ethical responsibilities and the application of ethics in 'real world' situations. Alternatively, if the accounting curriculum includes a specified course on ethics then the case would be suitable for this purpose. This case can be assigned in two ways: (1) as an individual project or (2) as a group project (ideally three or four students).

The major objective of this case is to enhance students' understanding of an accountant's legal and ethical duties to the client. In this case, three areas of legal areas are analyzed: contract law, tort law (fiduciary duty) and tort law (professional negligence/malpractice). This case is based on facts that were presented before an accounting body's professional disciplinary committee, and examines a number of dealings between a CPA and a small business client. The issues examined include: the acquisition by a CPA of a client from a former employer, the withdrawal of fees for accounting services without express client approval, and the provision of inaccurate client financial statements. Another focus of this case is to enhance student's understanding of an accountant's legal (contract and tort law) and professional ethical (code of conduct) duties owed to the client.

Keywords: Accounting ethics, contract law, tort law, negligence, malpractice, code of conduct, fiduciary duties, small business client, financial statements

Suggested Citation

Webb, Lawrence and O'Connell, Brendan T. and Carr, Chris and Higgins, Mark M., An Instructional Case in the Ethics of the CPA/Client Relationship: The Roadrunner and Howard Bean, CPA (2003). Research on Professional Responsibility and Ethics in Accounting (Formerly Research on Accounting Ethics), Vol. 10, pp. 221-229, 2005, Available at SSRN: https://ssrn.com/abstract=2186618

Lawrence Webb

RMIT University - School of Accounting and Law ( email )

124 La Trobe Street
Melbourne 3000
Australia

Brendan T. O'Connell (Contact Author)

RMIT University - School of Accounting and Law ( email )

445 Swanston Street
445 Swanston Street
Melbourne, Victoria 3000
Australia

Chris Carr

California Polytechnic State University, San Luis Obispo ( email )

Orfalea College of Business
1 Grand Avenue
San Luis Obispo, CA 93407
United States
805-756-2657 (Phone)
805-756-0110 (Fax)

HOME PAGE: http://www.cob.calpoly.edu/directory/profile/chris-carr/

Mark M. Higgins

University of Rhode Island - College of Business Administration ( email )

Kingston, RI 02881
United States

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