A good comment about the response of this question

Andy Anderson works in a public accounting firm. He was recently promoted to manager and hopes to move up the ladder to partner one day. Anderson was contacted by management at Positively Positive, Inc. The management of Positively Positive asked Anderson to prepare bid to audit Positive's financial statements. In discussing the audit fee, Positive's management suggests a fee structure in which the fee depends on the reported profit of Positive. The higher the reported profit, the higher the audit fee to Anderson's firm.

Apply the ethical decision making process to this situation.

1) Is there an ethical concern? If so, what is it?

2) What options are available? List at least three options and the potential consequences of each.

3) What should Andy Anderson do? Justify your response.

One good comment for this response

1.Yes, there is an ethical concern, in that Andy could fudge(lie about) the numbers so that the overall profit is larger then the true profit number,so that he can get a bigger paycheck.

2.a.He could accept the deal and do his job by reporting true numbers to the company, making the ethical choice.

b.He could also accept the deal and fudge the numbers to make that bigger paycheck, only to get caught and fired and take his certifications away andget fined and with possible jail time.

c.He could not accept the deal, only to lose a big client and ruin his chances to grow in the firm.

3.First what Andy should do is insist to the client that they should pay the set fee because that is how his company works.If they still insist to do it their way, then he needs to get with the Partners or the next person in the chain of command higher then him and explain what happened and tell them that he thinks there's and ethical concern if he takes the deal.They can either make him take the deal or not, as long as he has covered himself and stays true to his ethics, he should be fine.