Read the Ethics Cases listed below and answer the questions associated with each.

Ethics Case 1: Lord Conrad Black’s Fiduciary Duty?

Read the Ethics Case, Lord Conrad Black’s Fiduciary Duty? on pp. 277–281 of your text and answer the following questions (approximately one paragraph per answer):

• Should the Board of Directors be held responsible if they approved the non-compete agreements? Include an explanation of the role of the Board and who their primary stakeholder is in your answer.
• Was it illegal that Black controlled the company through shares holding more voting rights? Was it ethical?
• How could the conflicts of interest in this case have been prevented?

Ethics Case 2: HealthSouth–Can 5 CFOs Be Wrong?

Read the Ethics Case, HealthSouth–Can 5 CFOs Be Wrong? on pp. 304–309 of your text and answer the following questions (approximately one paragraph per answer):

• What were the deficiencies in HealthSouth’s governance structure?
• In cases of fraud, what is the auditor responsible for? Was the audit firm, Ernst & Young, deficient in its audit?
• What are the proper audit procedures to ensure existence of assets in the financial statements? What are the proper audit procedures to validate estimates?