Oviedo State Bank

In the case of Oviedo State Bank's audit, the reasoning and ethics involved in giving financial statements with material misstatements a clean unqualified opinion is a decision Jackie, a CPA and the lead auditor in this case has to decide. On the surface her duties and ethical judgments should not be evaluated. In today's economy were business profit triumph over social justice, auditors must demonstrate their ability to overcome profit and sacrifice their revenues in order to gain back their users confidence (Wyatt).

Her duty clearly is to express an opinion on the financial statements and obtain reasonable assurance that they present fairly in all material respects the financial position of OSB in conformity with accounting principles generally accepted in the United States. In her opinion, as she stated, the estimated loan loss reserves reported by management are materially misstated. She understands the incentives of the overstatement of net income, the economic reality and the possible going-concern issue of not giving an unqualified opinion. If OSB does not receive a clean audit then they may not be able to go public and raise capital to enter a new market. OSB needs a clean audit since their main market (3/5 of portfolio) has decreased significantly due to the Space Shuttle Program's uncertainty. OSB is the firm's largest client and they feel that Jackie should defer to their internal specialist judgments about any loan loss reserve estimates.

I find it very hard to rationalize any other decision than not giving a clean audit report. An auditor has a responsibility to the creditor/investor and economically to society to present the financial statements in accordance with GAAP/GAAS. This is going to be a going-concern issue as 3/5 of the portfolio (Titusville community) is significantly decreased with the downsizing of the Space Program. The auditor has no responsibility to the external community serviced or provided for by any company, especially at the expense of others, which is deontologically wrong because by definition any negative effect to a single entity is unethical. The issue of going-concern in a teleological approach beckons the issue Arthur R. Wyatt has proposed in "Accounting Professionalism-They Just Don't Get It!". It is more important, especially if going-concern is an issue not to keep the company alive to help the community and the company but that the "greater good" is to the profession and presenting the financial statements without regard to profitability especially if going-concern is an issue (Wyatt). The stakeholder's ultimately want a true reflection of the financial position of the company and as owners represent the greater good of the company over the management. Any manipulation of the numbers would not benefit the stakeholders in the long term. Any argument for the greater good being the company and the communities affected