THE DILEMMA OF AN ACCOUNTANT

The ethical dilemma in this case is one that Daniel Potter is faced with. Daniel is a staff accountant at a Big Eight accounting firm, Baker Greenleaf. He was given the duty of performing an audit on a wholly-owned real estate subsidiary (Sub) of a long-standing and important client of his firm. Oliver Freeman is Daniel’s project manager. Oliver is the one that gave Daniel the task of performing the audit, and he is expecting a clean opinion from Daniel on the analysis of the Sub in order to secure the clients account exclusively. While performing the audit, Daniel found a discrepancy with the value of the Sub’s largest real estate properties. The Sub had valued the property at $2 million on their balance sheet, and Daniel had estimated the value of that property to be much lower. Since the property was a dilapidated building in a bad location and had been vacant for a number of years, Daniel estimated the value to be $1.9 million less than what the Sub had valued it at. Daniel spoke with the managers of the