Case Studies

Case Study : Cardillo Travel Systems , Inc

1 . The accountants in this case who faced ethical dilemmas were Russell Smith and William Kaye . They both were instructed by top management to practice unethical accounting . Russell Smith was told to sign an affidavit stating that United Airlines (UAL ) paid Cardillo 203 ,000 for an unspecified transaction and that Cardillo 's equity was more than 3 million . Had he succumbed to the pressure inflicted by his boss , A Walter Rognlien , false documents would have been presented in court in favor of Cardillo . The general public

would have been cheated of the truth the investors , company 's creditors and government agencies would have been duped into believing the erroneous equity and income figures that Rognlien wanted to publish

William Kaye , on the other hand , was instructed to debit receivables from United Airlines amounting to 203 ,210 and to credit travel commissions or fees for the same amount . She did these things without questioning such s . In doing so , she , in effect , agreed to recognize as outright income the amount that was supposed to be properly booked as advance payments from UAL to be used for expenses pertaining to Cardillo 's shift of computer system from the one offered by American Airlines to that by UAL . Furthermore , she also was instrumental to Rognlien 's designs to falsify the company 's financial statements to avoid the bankruptcy that it was bound to end up in . Falsified statements provided misleading information for the investing public . It somehow...