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Directions Read the scenarios below and respond to the prompting questions in an a five sentence paragraph discussion, activities and reading assignments. You must fully answer each question.
Scenario 1 Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. • Identify the parties potentially affected by this audit and the fee plan proposed. • Summarize the ethical factors in this situation. • Would you recommend Thorne accept this audit fee arrangement? Describe some ethical considerations guiding your recommendation.
Scenario 2 You are an entrepreneur. You and a friend develop a new design for in-line skates that improves speed by 25% to 30%. You plan to form a business to manufacture and market the skates. You and your friend want to minimize taxes, but your prime concern is potential lawsuits from individuals who might be injured on these skates. • What form of organization do you set up? Explain your rationale. • Describe the ethical aspects you considered to select this form of organization. • Explain the ethical ramifications if you selected the other forms of organization. Not there are three forms of organization you could select from, so explain the ethical ramifications for the other two forms of organization you did not ?
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