Question

Spencer, the Purchasing agent of a Chick Industries, received two tickets to the upcoming Alabama versus Ohio State football game from a supplier. Spencer often authorizes purchases from this supplier. These football tickets sell for over $500 each.

What problems do you see here? What AICPA Codes of Professional Conduct are being broken here? Provide a one paragraph response.

Answer 1

The problem that I see here is that by receiving the two tickets to the upcoming Alabama versus Ohio State football game from a supplier Spencer is compromising his position as a Purchasing Agent of Chick Industries and will be compromising his integrity and independence as well in future by taking this token gift from a supplier. A conflict of interest will also occur and this is a significant problem. As per the AICPA Codes of Professional Conduct Spencer has to ensure (i) integrity and (ii) objectivity and independence while discharging his professional duties. By accepting a gift from a supplier Spencer is getting close to the supplier and even has a personal obligation to serve the supplier in future. This will, in all likelihood, lead Spencer to favor the supplier from whom he had received the tickets and will propel him to act in a subjective manner so as to do favors for the supplier even when the supplier does not meet the selection criteria or even when other suppliers are providing better terms and conditions and quality.