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The case of a hatchet job for D’Skushin

Ethics

Charles Selcer, CPA, MBA | February/March 2023 Footnote

Editor's note: Updated January 31, 2023

Frank D’Skushin is an assistant controller at Cats ‘n’ Jamas, Inc., a manufacturer of boutique clothing for pampered cats. His supervisor, Molly Hatchet, is the controller and told Frank not to record a certain invoice in accounts payable on Oct. 31, 2022. This misstatement’s effect is having Cats ‘n’ Jamas complying with a net income covenant with its bank when, in fact, it did not. Molly is not a CPA. Molly threatened to give Frank a pink slip if he mentioned this to the CFO. Frank complied.
 
Q. Is Frank unethical under the AICPA Code?

A.   Yes. At 2.130.020.06 and .07, it is considered subordination of judgment if you don’t take this issue to a level higher than Frank’s supervisor, who is the genesis of the problem. At 2.130.020.09, it is noted that Frank should consider resigning from Cats ‘n’ Jamas.
 

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