Halo University is a private faith-based university with lessthan 10,000 undergraduate and graduate students. The largestsources of revenue are tuition and donations. In the past tenyears, the football team has been wildly successful in a Division Iconference. Led by Coach Joe Smith, the team played in bowl gamesall ten years and finished seven seasons in the top 25 in the APPoll. University fans are wild with enthusiasm. Game are sold outand university colors are seen everywhere. Most importantly,enrollment and donations have increased by 5% each year for thepast 10 years. Although Coach Smith receives a $4.5 million a yearsalary, university administrators agree he is worth every penny.They are not worried about the current $15 million buyoutagreement; they want him to stay as long as possible! Joe Smithgrew up in the city where Halo is located. He played high schoolfootball before becoming a student and player at Halo. Aftercollege, Joe played professional football for three years. Aninjury sidelined him from the game, so Joe decided to coach. Joeserved as an assistant coach for another university for four yearsuntil his alma mater offered him the Head Coach position. He hasbeen loved by the university community. Everyone knew that he woulddo an excellent job.

On July 5, the president of the university received a phone callfrom the state police department. Coach Smith’s home was robbed inthe middle of the night. Coach Smith was fine but sent to thehospital for observation. The president immediately went to talk toCoach. Coach Smith assured the president that he was fine and wasthankful that no one else was at home at the time of the homeinvasion. Coach’s wife and three children were on vacation thatweek. The next day, the president and the coach held a pressconference to assure everyone that the Coach suffered only minorscrapes and bruises and that no one else was home at the time ofthe robbery.

On July 10, television reporters announced that Coach Smith wasin fact not home alone at the time of the invasion. A woman namedKaitlyn Anderson was there with him. She hid in the closet duringthe robbery. She left the home prior to Coach Smith calling thepolice in an attempt to stay out of the press. Although she did notincur any physical injuries, she was experiencing severe emotionaldistress from the robbery. The reporters also revealed that thecoach and Kaitlyn were having an affair for over two years. Aformer graduate assistant in the Halo athletic office, Kaitlynrecently completed her Master of Accountancy degree, passed the CPA, and is interviewing for a jobs at public accounting firms. Theuniversity formed an Ad Hoc Disciplinary Committee to address theissue. Members of the committee included the university president,the vice president of accounting and finance (who is a CPA), thehuman resource director, marketing and communications director,athletic director, and legal counsel.

1. What are the relevant facts of the case? Be sure to identifythe problem.

          Halo is asmall university (with 10,000 undergraduate and graduatestudent)

2. Governmental entities and not-for-profit organizations havetheir own Codes of Professional Conduct and/or Codes of EthicalConduct, many of which can be viewed online. Select an actualfaith-based private university and examine its Code of Conduct.Assume that Halo University has a code of conduct similar to theone you selected.

a. What parts of the code should the Ad Hoc Committee considerwhen making its decision about the ethical issue? (Identify theuniversity your chose for your code of conduct in your answer andprovide a link to the code.)

b. Does the Vice President of Accounting and Finance haveadditional professional obligations due to his CPA designation andposition at the university? If so, what are the additionalobligations? (Do CPAs have their own code of conduct?) c. Whatpersonal obligations, if any, should the committee membersconsider?

3. Who are the affected parties (stakeholders)? Be sure youranswer includes any relevant stakeholders who are not specificallymentioned in the case.

4. What are the potential options and courses of action the adhoc committee might pursue? List the potential ethical and/orpractical ramifications for each option. In your answer, considerthe points of view of the stakeholders you identified.

5. What do you think should be done in this situation?

Accounting Questions

1. What set of generally accepted accounting principles doesHalo University likely follow? What are the potential financialeffects of this situation and of the possible courses ofaction?

2. Budgeting and control are essential to not-for-profitorganizations.

a. What are the key purposes of operating budgets?

b. How do operating budgets of non-governmental not-for-profitentities differ from budgets of for-profit entities? fromgovernmental entities?

c. In this case, how might the present situation and differentcourses of action affect the present and future operatingbudgets?

Professional Development Questions

1. Kaitlyn has passed the CPA and will apply to be a CPA whenshe completes one year of work. What effects, if any, do you thinkthe enormous media coverage of this situation will have on

a. Kaitlyn’s job prospects?

b. Kaitlyn’s likelihood of becoming a CPA? (Could she be denieda license because of her actions related to this case?)

2. Is media, including social media, a concern for allindividuals who are interviewing? Explain. What actions shouldstudents take concerning their social media prior to a professionaljob search?