Case 5.6: Ryden Trucking, Inc.

Question 1

Regardless of how Lola Rojas used the funds she embezzled from Ryden Trucking, her behavior was unethical. The end does not justify the means in this case. Accountants are expected to be above reproach as they are required to be ethical at all times. This means that they ought to demonstrate aspects of trustworthiness and honesty. Ethical accountants have to follow the accepted accounting principles while preparing financial reports. There is the expectation of adherence to the professional code of conduct in daily practices. All the actions taken are supposed to be transparent for the sake of the parties using the financial statements that are involved. Unscrupulous accountants are the ones that use their positions to steal or embezzle funds from their clients. In this case, Lola Rojas went against the responsibilities of her profession despite how she intended to use the funds. As a result, her behavior was unethical.

Question 2

Jermell Marshall might have been motivated to go to such great lengths given the reputation that Rojas had established at the workplace. She was a hard worker and established positive relations with her peers and the client personnel. Marshall sympathized with her current situation given that her mother was ailing and she had nowhere else to turn to. Marshall believed that the tribulations in her life had led her to miss a step and act unethically. The way that Rojas accepted the accusation might have thrown Marshall off balance too. She began weeping as she tried to explain herself. This might have made Marshall believe that she did not have an alternative at that time, and she regretted her actions. Marshall on his part did not act prudently since this was a serious offense given the funds involved. He should not have let his heart lead him on this issue; he should have let varied accounting guidelines to take center stage too as they would have helped on showing the way forward.

Question 3

According to PCAOB, auditing standard no. 10 requires senior personnel that have been assigned to an engagement to supervise the team involved. Among the responsibilities involved there is:

  • Informing the engagement team members of their responsibilities that include the objectives of the procedures to be conducted, nature and extent of the procedures, and matters that could affect the procedures.
  • Directing the engagement team members that they should bring up significant accounting issues that might arise during the audit to help determine the appropriate cause of action.
  • Review the work of the team members to determine whether the objectives of the procedure were met, work was well performed and documented and that the results derived support the conclusions reached.

The extent that a supervisor can go to prevent his or her subordinates from engaging in criminal activities is reviewing the work that they are doing to ensure that there are no anomalies in the work that has been presented.

Question 4

Moral obligation is a duty that one owes, and they are expected to perform, but he/she is not legally bound to fulfill. Legal obligation of the other hand could result in a civil claim.

If someone fails to honor a moral obligation they have behaved “unethically” because this is something that is expected of them despite the obligation not being legally bound.

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