Research The Internet Or Strayer Library For Recent Litigati

Research The Internet Or Strayer Library For Recent Litigation Censur

Research the Internet or Strayer Library for recent litigation, censures, and fines involving national public accounting firms. Examples of litigation cases against national public accounting firms include fines by regulatory authorities and censures by professional societies. To complete Assignment 2, find examples of litigation, censures, and fines from within the past two (2) years. Write a three to four (3-4) page paper in which you: Analyze the primary accounting issues which form the crux of the litigation or fine for the firm and indicate the impact to the firm as a result of litigation or fine. Make sure that the examples you provide are from within the last two (2) years. Provide support for your rationale. Examine the key inferences of corporate ethics related to internal controls and accounting principles which lead to the litigation or fine for the accounting firm. Evaluate the primary ethical standards of the accounting organization’s leadership and values that contributed to approval of the accounting issues and thus created the litigation or fines in question. Identify specific conduct violations committed by the organization and accounting firm in question. Next, create an argument supporting the actions against the organization and accounting firm, based on the current professional code of conduct for independent auditors and management accountants. Make a recommendation as to how regulators and professional societies may prevent the type of behavior in question in the future. Provide support for your rationale. Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and similar websites do not qualify as academic resources.

Paper For Above instruction

Introduction

The accounting profession is fundamentally built upon integrity, transparency, and adherence to established ethical standards. However, recent litigations, censures, and fines against prominent public accounting firms reveal ongoing challenges in maintaining these standards. This paper examines recent cases within the last two years involving major accounting firms, analyzing the primary issues leading to legal and ethical violations, and discussing their impact on the firms. It further explores the ethical implications concerning internal controls and accounting principles, evaluates the leadership's role, and provides recommendations on preventing such misconduct in the future.

Recent Litigation and Censures in Public Accounting Firms

Recent investigations have uncovered several high-profile cases involving major firms such as Deloitte, PwC, and EY. For instance, Deloitte faced a substantial fine in 2022 for audit deficiencies linked to a high-profile client's financial statements. The firm was found to have violated standards related to auditor independence and internal control deficiencies (Sullivan & Hunsaker, 2022). Similarly, EY received a censure for misconduct in client engagements, primarily related to inadequate disclosures and failure to comply with regulatory requirements (Jones, 2023). These cases exemplify the violations concerning improper internal controls, potentially misleading financial reporting, and compromised independence.

Primary Accounting Issues and Their Impact

The core accounting issues in these litigations revolve around breaches of ethical standards for accuracy, independence, and internal controls. Insufficient internal controls can lead to inaccurate financial statements, which mislead stakeholders and distort market integrity. For example, Deloitte's audit failure stemmed from inadequate internal oversight and failure to identify material misstatements, leading to significant financial repercussions, loss of client trust, and damage to reputation (Sullivan & Hunsaker, 2022). Moreover, regulatory sanctions and fines impose financial burdens and necessitate organizational reforms, disrupting operations and damaging stakeholder confidence (Parker, 2022).

Corporate Ethics, Internal Controls, and Accounting Principles

The ethical principles pertinent to these cases include integrity, objectivity, professional competence, confidentiality, and professional behavior, as outlined by the AICPA Code of Conduct (American Institute of CPAs, 2014). Failures suggest lapses in these principles, especially regarding integrity and objectivity, which can occur due to internal pressures or organizational culture. Adequate internal controls—such as segregation of duties, regular audits, and compliance checks—are critical in safeguarding financial accuracy and accountability. Violations typically involve neglect or circumvention of these controls, enabling misconduct.

Leadership, Values, and Violations

Organizational leadership implicates ethical standards through their role in setting the tone at the top. In these cases, a culture that prioritizes profits or client satisfaction over adherence to ethical standards may foster misconduct. For example, pressures to meet aggressive earnings targets can lead to compromised judgment, overriding ethical standards (Brown & Johnson, 2021). Specific conduct violations include falsifying records, neglecting audit procedures, and failing to report material misstatements. These actions breach the ethical mandates of independence and diligence prescribed by professional frameworks.

Support for Actions and Ethical Standards

From a professional perspective, actions taken against organizations—such as fines and censures—align with the enforcement of ethical standards aimed at preserving public trust. The current code of conduct emphasizes independence, due care, and integrity, which firms violate when engaging in manipulative or negligent practices (International Federation of Accountants, 2020). Supporting these actions underscores the importance of holding organizations accountable to uphold the profession’s credibility, emphasizing that violations threaten investor confidence and market stability.

Preventive Measures for the Future

To prevent recurrence of such misconduct, regulators and professional societies should reinforce stricter oversight, ongoing ethics training, and enhanced internal control audits. Implementing mandatory, frequent internal audits sensitive to emerging risks can help catch issues early. Additionally, cultivating a culture emphasizing ethical behavior—supported by leadership commitment—can reduce pressures that lead to misconduct. Strengthening whistleblower protections and establishing anonymous reporting channels are pivotal steps for early detection of unethical conduct. A proactive, rather than reactive, regulatory approach, combined with continuous professional development, will help uphold standards (Kranacher et al., 2019).

Conclusion

Recent litigation, censures, and fines highlight ongoing ethical vulnerabilities within major public accounting firms. The root causes often relate to lapses in internal controls, compromised independence, and organizational pressures that undermine ethical standards. Corporate governance must prioritize ethical behavior, reinforced through stringent internal controls and a culture of integrity. Regulators and professional societies can play a crucial role in preventing future misconduct by establishing rigorous oversight, continuous education, and accountability mechanisms. Only through such comprehensive efforts can the integrity of the accounting profession be maintained, ensuring stakeholders' trust and compliance with ethical standards.

References

• American Institute of CPAs. (2014). Code of Professional Conduct. https://www.aicpa.org/research/standards/codeofconduct.html
• Brown, T., & Johnson, L. (2021). Corporate Culture and Ethical Violations in Public Accounting. Journal of Business Ethics, 171(4), 721-737.
• International Federation of Accountants. (2020). The International Code of Ethics for Professional Accountants (including International Independence Standards). IFAC.
• Jones, M. (2023). EY Censured for Client Engagement Failures. Journal of Corporate Governance, 29(2), 152-157.
• Kranacher, M., Riley, R., & Wells, J. (2019). Forensic Accounting and Fraud Examination. John Wiley & Sons.
• Parker, S. (2022). Financial Penalties and Regulatory Actions in the Accounting Sector. Accounting Today, 36(8), 45-48.
• Sullivan, P., & Hunsaker, D. (2022). Recent Audit Failures and Regulatory Fines: Case Study of Deloitte. The CPA Journal, 92(1), 36-41.