What is Wrong with Our Accountant?
This critical incident describes a scenario in which Amy and Dave Thompson, founders of a small food manufacturing startup, experience several tax and compliance issues and begin to question the professional competence and character of their Certified Professional Accountant (CPA), Bradley Smith. The critical incident illustrates the challenges of managing the accounting, tax, and business compliance work of a startup enterprise as well as the need to have professional support. Key themes of the critical incident include agency problems and related risks, and crisis decision-making. The critical incident illustrates the need for business owners to mitigate agency risks associated with contracting professional service providers
In completing this assignment, students should be able to:
1. Evaluate the importance and the related challenges of handling accounting, tax, and compliance issues for a startup business.
2. Identify best practices for maintaining controls and mitigating agency risk with outside professional service providers.
3. Apply a contingency decision-making framework to an ambiguous crisis situation.