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    Brett's discovery of HoBoy Distributors financial discrepancies

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    Brett, in his first year as a CPA with the firm Dewy, Cheatem, and Howe, is auditing a bank client. Last month Brett audited another firm called HoBoy Distributors. As Brett works on his bank audit, he notices that there are discrepancies between the financial statements supporting a bank loan to HoBoy Distributors and what he saw on his audit of that company. When Brett calls the CFO for HoBoy and informs him of the discrepancies, the CFO becomes evasive. The next day HoBoy's CFO informs Dewey, Cheatem, and Howe that their company has decided to engage another CPA firm.

    Choose one of the following responses for Brett and explain the ethical ramifications of your choice:
    a. call the CFO and try to persuade him to change the loan application.
    b. alert his bank client of his suspicions.
    c. do nothing.
    d. hint to the bank of his suspicions.
    e. report the information to Dewey, Cheatem, and Howe.

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    Solution Preview


    Calling the CFO and trying to persuade him to change the loan application is no longer Brett's responsibility since the company has already engaged another firm. ...

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    The solution examines Starbucks global expansion strategy with a focus on China.