The ethical dilemma in this case is one that Daniel Potter is faced with. Daniel is a staff
accountant at a Big Eight accounting firm, Baker Greenleaf. He was given the duty of
performing an audit on a wholly-owned real estate subsidiary (Sub) of a long-standing and
important client of his firm. Oliver Freeman is Daniel’s project manager. Oliver is the one that
gave Daniel the task of performing the audit, and he is expecting a clean opinion from Daniel on
the analysis of the Sub in order to secure the clients account exclusively. While performing the
audit, Daniel found a discrepancy with the value of the Sub’s largest real estate properties. The
Sub had valued the property at $2 million on their balance sheet, and Daniel had estimated the
value of that property to be much lower. Since the property was a dilapidated building in a bad
location and had been vacant for a number of years, Daniel estimated the value to be $1.9 million
less than what the Sub had valued it at. Daniel spoke with the managers of the Sub about writing
down the value of the property by what he had estimated, and they refused. Daniel decided to
submit his analysis with a “subject-to-opinion” designation since he and the client had a
difference of opinion. Oliver wanted to see a “clean opinion” in the case of the audit, but Daniel
refused to change it because that violated accounting regulations. Since Daniel would not
change his analysis, Oliver took it upon himself to pull the analysis and change it to a clean
opinion. Oliver also issued a negative evaluation on Daniel’s performance of the audit. Daniel
must decide what to do about the situation because ...