The case focuses on events surrounding Ernst & Young's tax shelter advice to senior executives of Sprint. The principal ethical lens used for analysis is Integrative Social Contracts Theory (ISCT). We believe that this is the first instance of ISCT applied specifically to a situation in accounting and to an ethical problem in a nonglobal context. Additionally, it is one of a small number of tax‐oriented cases focusing on ethics. ISCT offers several benefits over the traditional models applied in ethical analysis (Mintz 1997). ISCT integrates implicit and explicit contracts among affected business communities that enable a detailed normative assessment of rich ethical problems in a realistic economic world. The use of ISCT in this particular case provides students, instructors, and practitioners with a model to aid in: (1) understanding the normative justification for business decisions, and (2) assessing the quality of ethical decision making in a complex business setting.

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American Accounting Association
2004
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