An Audit Quality Inspection Scandal: Ethical Lapses in a Misguided Attempt to Alleviate Regulatory Scrutiny

2022 ◽  
Author(s):  
John D Keyser ◽  
Jason L. Smith ◽  
Nathaniel M Stephens
Keyword(s):  
Professional Practice ◽  
Audit Quality ◽  
Ethical Issues ◽  
Learning Objectives ◽  
Quality Inspection ◽  
Fraud Triangle ◽  
Program Understanding ◽  
High Ranking ◽  
Regulatory Scrutiny

In 2017, KPMG discovered that several high-ranking partners in its Department of Professional Practice (DPP) had surreptitiously obtained highly confidential information on upcoming PCAOB inspections. In obtaining this information, these KPMG partners were able to anticipate and prepare for PCAOB inspections, causing the firm’s inspection deficiency rate to plummet and its executives to tout the success of their efforts to improve audit quality. Once the firm discovered the scandal, the individuals involved were terminated, and six of them were ultimately convicted of felonies. This case study introduces students to relevant auditing standards, audit quality concepts, and facilitates discussion of a number of ethical issues. Learning objectives for this case include obtaining an understanding of the PCAOB and its inspection program, understanding audit documentation standards, demonstrating the ability to evaluate ethical issues, applying the fraud triangle in a unique setting, and assessing responsibility for the various parties involved.

Transitioning Business for a Circular Economy

2019 ◽  
Vol 2 (1) ◽  
Author(s):  
Susan EVANS
Keyword(s):  
Professional Practice ◽  
Circular Economy ◽  
Radical Change ◽  
Virtual Space ◽  
Professional Experience ◽  
Operational Model ◽  
New Vision ◽  
To Come ◽  
Space Requirements

This case study explores the strategic business opportunities, for Lane Crawford, an iconic luxury department store, to transition in a circular economy towards sustainability. A new experimentation framework was developed and conducted among cross departmental employees, during a Design Lab, with intention to co-create novel Circular Economy business concepts towards a new vision: the later was a reframe of the old system based on the principles of sustainability; to move beyond a linear operational model towards a circular economy that can contribute to a regenerative society. This work draws on both academic and professional experience and was conducted through professional practice. It was found that innovative co-created concepts, output from the Design Lab, can create radical change in a circular economy that is holistically beneficial and financially viable; looking forward to extract greater value a)Internal organization requires remodeling to transform towards a circular economy; b)Requirement for more horizonal teams across departments vs solely vertical; c)New language and relationships are required to be able to transition towards a circular economy; d)Some form of physical and virtual space requirements, for cross-disciplinary teams to come together to co-create; e)Ability to iterate, learn and evolve requires agency across the business

Prohibition, Legalization, and Political Consumerism

2018 ◽  
pp. 740-769 ◽  
Author(s):  
Elizabeth A. Bennett
Keyword(s):  
Social Movements ◽  
Legal Status ◽  
Ethical Issues ◽  
Drug Control ◽  
Psychoactive Substance ◽  
Political Consumerism ◽  
Control Laws ◽  
The Past ◽  
The Us

Cannabis (marijuana) is the most commonly consumed, universally produced, and frequently trafficked psychoactive substance prohibited under international drug control laws. Yet, several countries have recently moved toward legalization. In these places, the legal status of cannabis is complex, especially because illegal markets persist. This chapter explores the ways in which a sector’s legal status interacts with political consumerism. The analysis draws on a case study of political consumerism in the US and Canadian cannabis markets over the past two decades as both countries moved toward legalization. It finds that the goals, tactics, and leadership of political consumerism activities changed as the sector’s legal status shifted. Thus prohibition, semilegalization, and new legality may present special challenges to political consumerism, such as silencing producers, confusing consumers, deterring social movements, and discouraging discourse about ethical issues. The chapter concludes that political consumerism and legal status may have deep import for one another.

scholarly journals Managing a Craft Brewery: Competitive, Legal, and Environmental Forces

2020 ◽  
pp. 251512742096996
Author(s):  
Christopher A. Craig
Keyword(s):  
United States ◽  
The United States ◽  
The State ◽  
Learning Objectives ◽  
Craft Beer ◽  
Competitive Industry ◽  
Small Craft ◽  
Per Capita

The number of craft breweries and the volume of beer they produce continue to increase in the United States. Small entrepreneurial craft brewery businesses produce limited quantities of specialty beer, also known as craft beer. As of 2018 the state of Montana had the second most craft breweries per capita in the United States. In addition to competitive industry forces, legal and environmental forces are two of the most salient concerns for craft brewery businesses in Montana and throughout the United States. A case study about Montana Hop Brew, a Montana-based craft brewery, is presented. The case highlights the entrepreneurial nature of small craft breweries and describes competitive industry, legal, and environmental forces that Montana Hop Brew faces. Teaching notes complete with learning objectives, required and supplemental readings, a student exercise, and discussion questions are available to assist with delivering the case.

Correlates of academic misconduct and CSR proclivity of students

2014 ◽  
Vol 6 (1) ◽  
pp. 128-148 ◽  
Author(s):  
Stephen K. Nkundabanyanga ◽  
Charles Omagor ◽  
Irene Nalukenge
Keyword(s):  
Structural Equation ◽  
Statistical Modelling ◽  
Error Variance ◽  
Academic Misconduct ◽  
Fraud Triangle ◽  
Cross Sectional ◽  
Content Type ◽  
Quantitative Results ◽  
Corporate Social

Purpose – The purpose of this paper is to examine the effect of the fraud triangle, Machiavellianism, academic misconduct and corporate social responsibility (CSR) proclivity of students. Design/methodology/approach – The present study surveyed 471 university students. The study was cross-sectional and employed structural equation modelling in statistical modelling. Findings – The study provides evidence that perceived opportunity to cheat in examinations is the single most important factor accounting for significant variations in rationalization and academic misconduct. Similarly, low Machiavellians significantly get inclined to CSR ideals. The fraud triangle alone accounts for 36 per cent of the variations in academic misconduct, hence the error variance is 64 per cent of academic misconduct itself. This error variance increases to 78 per cent when a combination of perceived opportunity, rationalization, Machiavellianism is considered. Moreover, both Machiavellianism and academic misconduct account for 17 per cent of variations in students’ proclivity to CSR ideals. Research limitations/implications – Results imply that creating a setting that significantly increases a student's anticipated negative affect from academic misconduct, or effectively impedes rationalization ex ante, might prevent some students from academic misconduct in the first place and then they will become good African corporate citizens. Nevertheless, although the unit of analysis was students, these were from a single university – something akin to a case study. The quantitative results should therefore be interpreted with this shortcoming in mind. Originality/value – This paper contributes to the search for predictors of academic misconduct in the African setting and as a corollary, for a theory explaining academic misconduct. Those students perceiving opportunity to cheat in examinations are also able to rationalize and hence engage in academic misconduct. This rationalization is enhanced or reduced through Machiavellianism.

scholarly journals Audit Fee Research on Issues Related to Ethics

2017 ◽  
Vol 11 (2) ◽  
pp. A1-A22 ◽  
Author(s):  
David C. Hay
Keyword(s):  
Audit Quality ◽  
Ethical Issues ◽  
Audit Fees ◽  
Preliminary Evidence ◽  
The Body ◽  
International Ethics ◽  
Ethical Problems ◽  
Audit Fee ◽  
Risk Areas ◽  
Non Audit Services

SUMMARY Audit fees are related to important ethical issues for auditors. There has been increasing research on audit fees recently, including research on potential ethical risks regarding audit fees, which helps to illuminate some of these professional issues. The International Ethics Standards Board for Accountants (IESBA) is very interested in this area and asked me to prepare a paper reviewing the relevant research. This summary reviews research that became available from 2006 to 2016 on four issues related to audit fees—fee level, dependence, non-audit fees, and firms that have a significant non-audit services business. Examining the research shows consistent evidence about two issues, namely that audit fees for new engagements are lower and that non-audit services affect independence in appearance. There are two further issues about which there is some concern. First, there are occasional studies reporting evidence that non-audit services provided by an auditor are associated with a loss of independence indicated by lower audit quality, even though most research does not support this conclusion. Second, there has been recent concern about growth in non-audit services to non-audit clients and there is some preliminary evidence that audit quality is lower in firms that have more extensive non-audit businesses. In general, although audit fee research does not convey a message that there are widespread ethical problems, the body of research shows that there are some risk areas.

Problem-posing in management classrooms for collective sustainability transformation

2021 ◽  
Vol 22 (3) ◽  
pp. 477-496
Author(s):  
Janette Brunstein ◽  
Mark Edward Walvoord ◽  
Ed Cunliff
Keyword(s):  
Transformative Learning ◽  
Learning Objectives ◽  
Problem Posing ◽  
Content Type ◽  
Analysis Methodology ◽  
Unique Approach ◽  
Teaching Cases ◽  
Classroom Use

Purpose The purpose of this study is to examine the possible benefits of approaching sustainability-related teaching cases from the perspective of problem-posing (PP) instead of problem-solving (PS). Design/methodology/approach A document analysis methodology (Silverman, 2011) was used to analyze sustainability teaching case study abstracts and learning objectives from business databases. Cases were reviewed and classified as PP, PS or other. PP cases were further subclassified on one of three axes. Findings Of 117 cases reviewed, most were PS (66%) with only 9% PP. Theoretical and pedagogical implications are discussed with recommendations for writing or converting, PS to PP cases for classroom use. Theoretical contributions include identification of three distinct and complementary views of PP, described in these axes: emancipatory; problematizing metaphors and premises; and rational, process and means-focused cases, not triggering transformative learning theory. Of 10 cases classified as PP cases, 3 were subclassified as emancipatory. Research limitations/implications This research is limited to case study titles containing “sustainability” and analyses of their descriptions and learning objectives only. Next phases of the research will examine differences in student learning between PS and PP in situ. Practical implications The research identifies a unique approach to the authoring and use of case studies that hold the potential for increasing students’ critical thinking capabilities and production of solutions to sustainability issues. Originality/value There is limited research and analysis of the identification and implications of using PP pedagogy.

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