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you just passed the CPA ex am and you're on your way a great job a new car and more the hours are long but you are glad to be employed you work for Doolittle and dally a specialty internet retailer with warehouses and sales personnel throughout the u.s. you're excited because it's a fast growing business and you believe it's positioned to succeed besides part o your compensation is in stock options what you believe will have significant value once the company goes public still you have a lot of questions about the company's internal control system and lack of documentation to support certain journal entries I have some urine adjustments I need you to make okay I need you to adjust eight hundred and fifty thousand dollar for Bill and hold sales where's the paperwork nice and easy also apply five hundred thousand dollar wire from our affiliate to the outstanding balance in the Nevis account this one though is significantly past oh and I don't want any questions for your honor so take care of that one last thing I need you to reduce the reserve for doubtful accounts by half a million okay listen I got to make a call so I gotta go see ya later you read up on the guidance and conclude that the timing of the revenue recognition for the bill and hold sales is not appropriate you also recall overhearing the accounts receivable clerk bill calling nevus about it significantly overdue balance you remember that the call was a bit of shouting match ending with Bill slamming down the phone you conclude that all three entries are material and believe them to be an error you are conflicted however as you were not aware of any problems with the company's financial condition look I understand your concerns the adjustment our material had no impact on current your earnings and they're made consistently year after year okay I need you to fill out this borrowing base certificate for the bank it's due on Friday and we need it we have to renew extend and increase our deficit e okay oh by the way the auditors are coming on Monday what follow-up should you take after thinking on it throughout the day you decide not to book the adjustments or complete the borrowing base certificate you plan to give notice effective Frida to avoid having to disclose anything to the auditors after all they will figure it out 1.Please state what the ethical dilemma(s) is/ Make sure you include what they are for the different people directly involved and for the whole organization. 2.If you are the CPA with the dilemma, what approach would you use to pursue the matter from here? 3.Based on that approach - and the breadth of responses you are likely to face - what basic types/categories of solutions are you likely to arrive at? 4.Describe how you'd decide what specific actions to take? 5.Supposing a set of facts you obtained, describe exactly what you should do in this situation if you're the CPA. What would your goals be from those actions? 6. How would you decide if this worked or not? What criteria would you use to come up with an evaluation

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