27.    Ethics and altering the books (adapted from CMA exam). QT Investments, a closely held investment  services  group,  has  been  successful  for  the  past  three  years.  Bonuses  for  top management have ranged from 50 percent to 100 percent of base salary. Top management, however, holds only 35 percent of the common stock, and recent industry news indicates that a major corporation may try to acquire QT. Top management fears that they might lose their bonuses, not to mention their employment, if the takeover occurs. Management has told Bob Evans, QT’s controller, to make a few changes to several accounting policies and practices, thus making QT a much less attractive acquisition. Bob knows that these ‘‘changes’’ are not in accordance with generally accepted accounting principles. Bob has also been told not to mention these changes to anyone outside the top-management group.

a.    What are Bob Evans’s responsibilities?

b.    What steps should he take to resolve this problem?