Ethical Obligations and Decision Making in Accounting, 4/e 1
Case 5-8 Bill Young’s Ethical Dilemma
Bill Young felt uneasy but good about downloading hundreds of pages of documents about
Infant Products Inc., an audit client of his CPA firm, Rogers & Autry, which involved the bribery
of foreign government officials to gain favored treatment—a crime under the Foreign Corrupt
Practice Act. He had stumbled upon the information while looking for other files online. Bill had
already decided to quit his job and was in the process of cleaning up his office and boxing
personal items. He thought about it but did not see anything wrong with the downloading.
Besides, the bribery case involved selling tainted infant formula in China. Payments were made
to government officials to look the other way.
Bill pondered what his options were. Should he inform management of the firm even though he
had handed in his official resignation letter? Should he disclose the matter to an investigative
Questions
1. You are Bill’s best friend. Assume he asks for your advice about what he should do.
What would you say and why? Support your answer with reference to relevant
auditing and/or ethics requirements.
Even though Bill has decided to quit his job at Rogers & Autry, he has an ethical obligation not
to divulge confidential client information outside of the firm. Even if he had already quit the firm
the obligation would be the same. The ethical obligation for confidentiality doesn’t leave an
accounting professional even after leaving one’s employer.
The most ethical thing to do is inform management of the firm and let them deal with it. This
demonstrates professionalism. He would act in accordance with the virtues of responsibility and
show loyalty to the firm as well as recognition of the importance of discovering what he has to
the audit. Bill will meet his public interest obligation if he takes these steps.
Ethical Obligations and Decision Making in Accounting, 4/e 2
2. Bill is at home now having already spoken to you about the matter. He decides to
carefully consider the consequences of his actions. What are the harms and benefits
of the alternatives identified by Bill?
If Bill stays silent his actions may continue to harm innocent children who drink the tainted
formula. The company continues to violate the law. The firm’s reputation is at stake. The only
benefit of staying silent is out of revenge if Bill feels he was treated unfairly by the firm. Perhaps
3. Assume Bill decides not to follow your advice but calls you again to let you know
about his decision. If you sense an opportunity to provide additional input during
the conversation, what would your advice be to Bill at this point and why?
Instructors should use this question to ask students whether they would come forward with the
information. Perhaps they would contact the reporter who has been sniffing around the company
for months. What are the responsibilities of Bill’s friend in this case? Is there a societal