Terry House, the controller for MicroTech Software Company, is responsible for preparing the company’s financial statements. He learns that sales for the first quarter of the year have dropped so dramatically that the company is in danger of bankruptcy. As a result, he applies for an accounting position with another software company that competes with MicroTech. During his job interview, Terry is asked why he wants to leave MicroTech. He replies truthfully, “The company’s sales are down another 10% this quarter. I fear they will go out of business.” At that time, MicroTech had not released its sales results to the public. Discuss the ethics of this situation.
Terry House, the controller for MicroTech Software Company, is responsible for preparing the company’s financial statements. He learns that sales for the first quarter of the year have dropped so dramatically that the company is in danger of bankruptcy. As a result, he applies for an accounting position with another software company that competes with MicroTech. During his job interview, Terry is asked why he wants to leave MicroTech. He replies truthfully, “The company’s sales are down another 10% this quarter. I fear they will go out of business.” At that time, MicroTech had not released its sales results to the public. Discuss the ethics of this situation.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor
Section: Chapter Questions
Problem 40RQSC
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Terry House, the controller for MicroTech Software Company, is responsible for preparing the company’s financial statements. He learns that sales for the first quarter of the year have dropped so dramatically that the company is in danger of bankruptcy. As a result, he applies for an accounting position with another software company that competes with MicroTech. During his job interview, Terry is asked why he wants to leave MicroTech. He replies truthfully, “The company’s sales are down another 10% this quarter. I fear they will go out of business.” At that time, MicroTech had not released its sales results to the public.
Discuss the ethics of this situation.
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