Accounting Ethics

INSTRUCTIONS: Exam #1 is comprised of two sections. The first is a short answer section of five questions. Each question is worth fifteen (15 points). Review each question and write a short answer in your own words to appropriately cover the question. If you further clarify the question, you can post your reference using the appropriate APA citation. The second section is an exercise regarding disclosure taken from your textbook, this section is worth seventy-five (75) points. The exam is open book, you can reference course material and e-resources used throughout the class. Submit your answers in a Word or PDF file, include a cover page with your name, the course, and the exam #. All pages must be submitted together (section 1 and 2) but distinguished appropriately; Section 2 should be started on a new page at the top. The file should be single spaced, 12pt. Arial font, with one space between questions and/or paragraphs. The EXAM file must be submitted by 11:59PM Tuesday February 3rd, 2026. SECTION 1 (Each question is worth 15 points) 1. Accounting standards have evolved over time. What has been the driving force behind the changes and how do the changes strengthen the profession of accounting. 2. What is the difference between actions, practices, institutions, and systems? 3. Define ethical egoism and contrast it to psychological egoism. 4. What is the difference between self-interest and selfishness? 5. What is virtue ethics? What question does it ask? SECTION 2 (Entire section /response is worth 75 points) To Disclose or Not to Disclose? That is the Question. You are a CPA and the controller for a small savings and loan. The organization is at a critical juncture. You and top management of the savings and loan have a meeting about the status of the organization prior to your annual audit. The main concern is the collectability of several real estate loans. The savings and loan is a small player in a group of savings and loans that participated in several large development properties. While the savings and loans investment is small compared to the overall total invested in these projects, the amount invested is material to your firms balance sheet. With the recent downturn in the housing market, the futures of the development properties are in jeopardy. The president of the savings and loan just participated in a phone conference with the other investors and tells you that a group of the largest investors are negotiating with the developers on a writedown on the loans. The potential writedown of these assets would have a devastating impact on the solvency of your savings and loan. Management points out that at this time there are only discussions going on and nothing has been committed to paper, but it is a real fear that the process will progress, and a writedown is likely within the next six months. The auditors are scheduled to begin their audit next week. If you disclose this information to the auditors, you fear that it will lead to a “Going Concern” opinion, which in most probability would be the beginning of the end for the institution. Not disclosing the potential writedown would give you a chance to locate a position elsewhere prior to the failing of the savings and loan. 1. What do you do? 2. What ethical issues are involved in the case? 3. What gives rise to the ethical dilemma? ________________________________________ Duska, R. F., Duska, B. S., & Kury, K. W. (2018). Accounting Ethics. &chunkid=398391907