ethical responsibilities
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You have recently been hired by Jenny and Brad as corporate controller. After being on the job 6 months, you are given a raise and additional responsibilities in other commonly owned corporations. One of you responsibilities is being the check signer.
You notice that you are signing checks payable to Design Emporium (a local, pricey contemporary furniture store) and Stone and Marble (a kitchen and bath tile supplier of stone and granite). You are not aware of any major rehab or design projects that are going on at XYZ Corporation or any of its divisions. You mention these checks (which are for substantial amounts) to Jenny and Brad who indicate that the procedure is correct.
How do you handle this situation? Determine what may be going on in this situation. As the company's controller, what are your ethical responsibilities? What are the personal ramifications, if any?
Assume you are a CPA and discuss and apply AICPA Standards of Conduct to this situation.
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STEP 1
How do you handle this situation?
You first observe the situation for a period of time. In my opinion because Jenny and Brad have approved of the transaction, you should continue to keep a watch on the situation. Keep a note of the details of the checks that you have signed including the name of party, the date, amount and the check number. You should keep a watch out for any other checks that look suspicious. You may even make photocopies of the checks. At this stage documentation and measurement of such transactions is important.
This material is taken from the website: http://www.aicpa.org" Maintain professional skepticism. If you get an explanation for the situation think about whether it makes sense. Continue to observe over time to see if the situation plays out as expected.
Maintain documentation of the issue -- your thoughts and decisions all along the way, and the parties with whom you discussed these issues -- to review later as may be necessary.
Even if you are ...
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