The stakeholders here include the investors and the employer. Therefore, the main stakeholders who need the audit report most for future use are the investors. However, according to the question, the investors have declined to provide more funding for the ACME Corporation; therefore, even if the audit firm decides to conceal the unrecorded liability of $2 million dollars, this may not have affected the investors’ decision in any way. Nonetheless, the auditor’s decision to conceal this information is still wrong because according to the AICPA Code of Professional Conduct and Josephson’s Six Pillars of Character, all auditors are required to adhere to code of ethics of their profession and disclose any form of accounting malpractice they discover during audit to the right people for further action (Allen, 2018).
The Six Pillars of Character entail six different virtues that auditors must adhere to, and they include respect, trustworthiness, fairness, responsibility, citizenry, and responsibility. Therefore, being trustworthy means that auditors must remain honest, reliable and act with integrity (Allen, 2018). Moreover, the auditors are expected to exercise loyalty and express the truth all the times especially in their auditing reports. The AICPA Code of Professional Conduct requires auditors to resolve conflicts among the organization stakeholders through performing the CPA's responsibilities. Performing these responsibilities to the public is the best approach towards serving the interests of their clients.
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The public interest includes investors, government, the financial community, the business, client’s grantors and employers as well as any other party that depends on the integrity and objectivity of CPAs to help them maintain smooth functioning of commerce at all times (Spalding & Lawrie, 2019). Also, the auditors will be expected to maintain autonomy and only get directions from CPAs. Therefore, the auditors who audited the ACME Corporation must reveal the unrecorded liability of $2 million dollars to the stakeholders without giving in to Brent’s pressure because that is what their profession demands.
References
Allen, C. R. (2018). A New Take on Ethics and Independence: A Refreshed International Code Emphasizes 3 Key Objectives for Professional Accountants. Journal of Accountancy , 226 (6), 44.
Spalding, A. D., & Lawrie, G. R. (2019). A critical examination of the AICPA’s new “conceptual framework” ethics protocol. Journal of Business Ethics , 155 (4), 1135-1152.
