Sample Business Case Study on Accounting Profession

Accounting Profession

In the United States, accounting is among the most marketable professions that promise direct transfer from the education system to the country’s workforce. Accounting professionals work in different settings that vary from manufacturing companies to consultancy services in firms. Other accounting jobs include working in managerial positions, project planning, and working in government tax offices. Aside from the university undergraduate degree that can be acquired after studying accounting, there are accounting certifications that are relevant.

Accounting Credentials and Certification

The most common accounting certification is the certified public accountant (CPA) certificate. It offers a basis for practicing in the public domain. Other accounting certifications essential in the civil field include the Accreditated Business Valuation (ABV) and Certified Valuation Analyst (CVA). Examination for ABV practitioners consists of two sections and are administered by the American Institute of Certified Public Accountants (AICPA). Candidates must complete 75 hours of an industrial learning process before applying for the examinations. The Certified Valuation Analyst (CVA) is based on five-day training offered to members of the National Association of Certified Valuation Analysts (NACVA) (Watty, Jackling, & Wilson, 2014; Wierich, Churyk, & Pearson, 2012). These two certifications require applications to study CPA first before signing up for advanced certification.

In the corporate accounting field, the most popular certification includes the Certified Management Accountant (CMA), Certified Accounts Payable Associate (CAPA), and the Certified Treasury Professional (CTP). The Institution of Management Accountants offers these certifications. These qualifications require a four-section examination created to develop critical thinking and decision-making practices. The certification is offered to professionals interested in managing accounting departments in firms or works as chief financial officers (Wierich, Churyk, & Pearson, 2012). Candidates interested in applying for CAPA and CTP certificates require approximately three years of working experience and an associate degree in accounting.

Those interested in working in government institutions can obtain a Certified Government Auditing Professional Certificate (CGAP) from the Institution of Internal Auditors (IIA). The examination offered to candidates interested in this sector tests their auditing knowledge in the public sector and their legislative oversight. These candidates are required to have a 2-year experience in government auditing, 4-years postgraduate degree, and other work-related qualifications. Obtaining this certificate can increase an individual’s professional earnings by approximately 40%. Additionally, accounting professional interested in advancing their skills and knowledge in government accounting can obtain other professional designations such as Certified Bank Auditor (CBA), Certified Financial Services Auditor (CFSA), Certified Internal Auditor (CIA), and Chartered Financial Analyst (CFA). Some of these qualifications in the accounting field complement each other and can help professionals advance their careers faster. In internal auditing, the CIA is the qualification accepted internationally (Watty, Jackling, & Wilson, 2014; Wierich, Churyk, & Pearson, 2012). A degree in the accounting field increases an individual’s opportunity of advancing their careers through the addition of some of these certifications.

Professional Organizations and Governing Bodies

Some of the professional bodies that govern the accounting professional in the United States include the Association of Chartered Accountants in the United States (ACAUS), the Financial Accounting Standards Board (FASB), the Accounting Principles Board (APB), the Government Accounting Standards Board (GASB), and the Federal Accounting Standards Advisory Board (FASAB). ACAUS is an education organization aimed at promoting the roles of chartered accountants in the workplace. The GASB provides accounting principles that are accepted at a national level and are used by the state and local governments to oversee accounting practices (Flood, 2018). FASAB is a private non-profitable organization that helps in setting the standards and principles implemented in accounting.

Aside from these, other boards such as the American Accounting Association and the American Institute of Certified Public Accountants (AICPA) also guide accounting professionals in the country. The American Accounting Association (AAA) provides the basis of accounting education in the country (Flood, 2018). AAA shapes the profession through research, teaching, and creating a network of accountants throughout the country.

The AICPA is the main governing body in accounting. The AICPA offers voluntary membership to accountants across the country and represents accounting professionals by standardizing accounting rules that need to be followed, work setting, and legal advisory. This body also develops standards for implement professional development strategies, sets ethical requirements for its members, provides educational guidance and materials to accounting institutions, develops CPA examinations and grades them, and conducts quality assurance procedures. The AICPA works collaboratively with other accounting boards such as the Chartered Institute of Management Accountants (American Institute of Certified Public Accountants, 2018). These two organizations formed the Association of International Certified Professional Accountants to unite accountants within the country. The AICPA is also a member of the Confederation of Asian and Pacific Accountants (CAPA). Its membership in the CAPA promotes unification of accounting practices in the United States with those in foreign countries.

Laws Governing the Accounting Profession

The accounting professional is governed by a set of laws referred to as the Generally Accepted Accounting Principles (GAAP). These principles are a set of rules that entail the details, complications, and legal issues related to the practice of accounting or involvement in businesses. The FASB uses these laws as the foundation for its set of standard approaches used in accounting practices. The United States government requires firms interested in releasing their financial statements to the public to adhere to these guidelines. Companies that participate in the stock exchange are also required to follow the rules outlines through the GAAP. These guidelines are based on ten key concepts that relate to the practice of accounting. They include the principle of regularity that ensures that companies follow the rules and regulations and the law of consistency that entail application of financial rules throughout the financial reporting procedures. Other principles include sincerity, use of consistent methods, non-compensation, discretion, periodicity, materiality, continuity, and honesty (Flood, 2018). These principles prevent fraud in accounting.

Case Study

Summary of the Case

On November 2, 2017, Osiris Therapeutics Company, which is based in Maryland, was charged with prioritizing the growth of their company’s revenue over proper accounting practices that misled investors and customers. The company was accused on regularly overstating their performance and issuing fake financial statements to investors for approximately two years. Accusations made against the company included improper recognition of revenue by applying exaggerated artificial prices, backdating some of the financial reports to incorporate the income that had been earned during past years, and recognizing revenue prematurely after delivering products that were supposed to be held for shipment. The executive staffs in the company and the accounting professionals were also charged with using false pricing information and fabricating transactions to gain revenue from investors. Their actions made investors believe that the company was expanding through the growth of its revenue. The company was forced to pay a settlement of $1.5 million.

Short-Term and Long-Term Impacts of the Problem on the Profession

Some of the important aspects of the accounting profession that were affected by this case include the inability to adhere to the GAAP principles that govern the accountants. These actions went against the policy of regularity that dictates that companies should adhere to established accounting rules and regulations. These regulations entail the need to maintain sincerity and honesty at all times. Some of the short-term impacts include the humiliation of being charged with fraud and misleading investors that had placed their trust and investments in the company. Aside from that, other short-term impacts affecting the accountants include possible suspension of their licenses until the case has been resolved.

Depending on the weight of the case, the licenses of the accountants involved can be suspended for a specific period. Another short-term problem that may also be categorized as a long-term problem is the disgorgement of the gains obtained by the professionals imposed on the accountants and executing officials involved in the case (Charifzadeh & Taschner, 2017; Pedneault, Silverstone, Rudewicz, & Sheetz, 2012). The interests and penalties associated with these gains may take a long time to pay back.

Regarding the long-term effects of committing the fraud, the accountants in the company face the risk of losing their practicing certificates. Since the accountants were responsible for formulating the scam, they will lose their right to practice in this field. If the accountants had a CPA or any other accounting certification, it would be revoked to prevent them from seeking employment in other firms. Based on the severity of the case, the accountants can face criminal persecution (Brigham & Houston, 2012; Pedneault, Silverstone, Rudewicz, & Sheetz, 2012). In the case of imprisonment, the accountants may spend a considerable length of time in prison based on the accusations that were made against them.

Short-Term and Long-Term Impacts of the Problem on the Company

In the case of the company, some of the short-term impacts that would affect it include the destruction of its reputation based on the fraudulent claim. It may take a long time for the company to regain the trust of its investors and customers. The company was also charged with a $1.5 million penalty that would further affect its revenue. Long-term issues that may affect the company include withdrawal of other investors from the company over time thereby limiting the opportunity of the company to thrive on limited revenue and resources. The shares of the company are also likely to go down as some shareholders may wish to sell their shares due to the impending downfall of the organization. The company may need to remodel its executive office to retain their trust of investors (Charifzadeh & Taschner, 2017). Some valuable employees may also wish to leave the company based on its reputation.

Considering that the executive office and the accountants working in the company were found to be guilty, the company and its officials were charged based on the laws governing accounting practices in the country. The federal government and the boards overseeing accounting practices implement clear guidelines on businesses to account for their revenues, expenses, profits, and losses. By getting involved in fraud, company officials expose themselves to legal charges that could affect their businesses. Implications such as revocation of certificates and suspension of licenses due to fraud can make companies involved in fraudulent activities experience significant losses. Adherence to the GAAP principles by companies is a step towards avoiding cases of fraud.




American Institute of Certified Public Accountants. (2018, 3). Retrieved from American Institute of Certified Public Accountants:

Brigham, E. F., & Houston, J. F. (2012). Fundamentals of Financial Management. Cengage Learning.

Charifzadeh, M., & Taschner, A. (2017). Management Accounting and Control: Tools and Concepts in a Central European Context. John Wiley & Sons.

Flood, J. M. (2018). Wiley GAAP 2018: Interpretation and Application of Generally Accepted Accounting Principles. John Wiley & Sons.

Pedneault, S., Silverstone, H., Rudewicz, F., & Sheetz, M. (2012). Forensic Accounting and Fraud Investigation for Non-Experts. John Wiley & Sons.

Watty, K., Jackling, B., & Wilson, R. M. (2014). Personal Transferable Skills in Accounting Education. Routledge.

Wierich, T. R., Churyk, N. T., & Pearson, T. C. (2012). Accounting and Auditing Research and Databases: Practitioner’s Desk Reference. John Wiley & Sons.