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2. Your company is bidding against another company to sell multi-billion-dollar industrial equipment to the country of Brazil. The other bidder is a state-owned enterprise that is owned by a country run by a ruthless dictator. This dictator regularly mutilates and tortures citizens who disagree with his policies. This dictator’s economy is struggling, and the dictator really needs the cash flow from this proposed sale to prop up his economy.

a. Would it be ethical for your company to bribe Brazilian officials if, by doing so, you help topple this dictator from power?

b. Would it be ethical for your company to bribe Brazilian officials if you have learned that this competing state-owned company has offered bribes to these officials?

3. Prior to its demise, Countrywide Mortgage was one of the largest mortgage originators and loan servicers in the United States. Its top executive, Angelo Mozilo, offered mortgage loans to key government officials and members of Congress at rates that were lower than the rates charged on identical loans to the general public. These loans were called “Friends of Angelo” loans. Was this ethical? Was this a crime?

11. A retail store carries goods from two small beverage manufacturers. The owner of the store has asked you to pay a flat $100 “supplemental fee” weekly to be featured prominently by the checkout aisle.

a. Is this “supplemental fee” ethical?

b. Would this “supplemental fee” be ethical if the store owner agreed to move your competitor’s merchandise to a remote corner in the back of the store, but did not change how your product was displayed?

c. Would this “supplemental fee” be ethical if the store owner agreed to feature your beverage prominently and discontinued stocking your competitor’s merchandise altogether

13. Section 5061(a) of California’s Business and Professions Code states that “a person engaged in the practice of public accountancy shall not. . .pay a fee or commission to obtain a client.” You are a young CPA who wants to purchase the professional practice of a CPA located in California who is about to retire. Because you do not have much capital, you tentatively have agreed to pay the retiring CPA an amount equal to “20% of the client fee revenues generated over the next two years.” Does this arrangement violate California law?

14. In the accounting profession, what is the
key difference between a referral fee and a commission?

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