1. Assume that both Popperson and Snow are CPAs. Do you think Snow violated his confidentiality obligation under the AICPA Code by informing Popperson about the faulty equipment at CSM? Why or why not. As a licensed CPA firm, do you think Hodgins and Gelman has any ethical responsibilities in this regard?

2. Popperson has not told anyone connected to the Beauda Medical Center audit about the situation at CSM. What do you think he should do with the information? Be sure to consider Popperson’s ethical obligations in answering this question. Would Hodgins and Gelman be affected in any way but what Popperson decides to do? Assume Popperson informs the senior in charge of the Beauda Medical audit and the senior informs the manager, Kelly Kim. A meeting is held the next day with all parties in the office of Ben Smith, the managing partner of the firm.

3. Using Kohlberg’s model of moral development, explain what actions should be taken by the firm assuming it reasons at levels 2-5. What would you recommend the firm do in this matter? Why?

4. What do you think about Lance’s suggestion to contact the state board for advice on the matter? Is that the function of a state board of accountancy? Are there any other parties that might be contacted to provide guidance on this matter?