Ethics accounting | Accounting homework help



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AP4–4 Between his freshman and sophomore years of college, Jack takes a job as a ticket collector at a local movie theatre. Moviegoers purchase a ticket from a separate employee outside the theatre and then enter through a single set of doors. Jack takes half their ticket, and they proceed to the movie of their choice.

Besides trying to earn enough money for college the next year, Jack loves to watch movies. One of the perks of working for the movie theatre is that all employees are allowed to watch one free movie per day. However, in the employee handbook, it states that friends and family of employees are not allowed to watch free movies. In addition, employees must pay full price for all concession items.

Soon after starting work at the theatre, Jack notices that most other employees regularly bring their friends and family to the movie without purchasing a ticket. When Jack stops them at the door to ask for their ticket, they say, “Jack, no one really follows that policy. Just be cool and let us in. You can do the same.” Jack even notices that upper management does not follow the policy of no family and friends watching free movies. Furthermore, employees commonly bring their own cups to get free soft drinks and their own containers to eat free popcorn.

Jack considers whether he should also start bringing friends and family and enjoying the free popcorn and beverages. He reasons, “Why should I be the only one following the rules? If everyone else is doing it, including upper management, what harm would it be for me to do it too? After all, when you watch a movie you aren’t really stealing anything, and popcorn and drinks cost hardly anything. Plus, I really need to save for college.”


In 1 and 1/2 double-spaced pages discuss the ethical dilemma Jack faces. What is the issue? Who are the parties involved? What factors should Jack consider in making his decision? 

 It will help you … (Your written report should have the following structure to obtain full points: issue —State the issue being presented by the case. An example would be — “The ethical issue being addressed by this case is whether or not it is ethical for an auditor to accept gifts from a client when she/he is auditing that client. Rule — If possible, site the rule of Professional Ethics that applies to the case. In our example the following rule taken from AICPA code of Professional Conduct (see tyould be appropriate: .01 Rule 101—Independence. A member in public practice shall be independent in the performance of professional services as required by standards promulgated by bodies designated by Council. Application of Rule —Describe how you would apply the rule you cited above to the ethics case. For example you might say (in the example from above) The Auditor should remain independent of the Client during the audit. This means that the acceptance of expensive gifts may be seen as a breach of the auditors’ independence and therefore it may be unethical for an Auditor to accept any gifts from the client. Even small gifts may be seen by the public to taint the auditors’ independence. Page four Conclusion —State how you would resolve the case. Describe the actions you would take. To continue from our example above you might say: eased upon the facts of the Ethics case and the application of Rule 101— Independence,) would instruct the auditor not to accept any gifts from aclient — no matter the size —during the time period that the Auditor is performing the Audit. Auditors must remain independent in both fact and appearance and as such the acceptance of gifts from a client during an audit may compromise the auditors’ independence.) 

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