Frank, a senior audit manager has recently been informed that the firm hop_es to promote him to partner within the next few years. He recently has been assigned to audit a big company, who is also one of their greatest clients. During the audit, Frank notices that the client uses a method of revenue recognition called "bill and hold", which has been questioned by the Ontario Securities Comission. After considerable research, Frank concludes that the method of revenue recognition is not appropriate and need to be changed.

Frank discuss the issue with his Manager. His Manager, believes that the firm will lose the client if the method was found inappropriate. Frank argues that the method was appropriate previous years but new government rulings make it inappropriate. The manager asks Frank to drop it and leave all the issues for him; if anything came up. Frank cannot do anything else but he strongly believes that the method is inappropriate.

what are the ethical issues? Creat a memo for the manager and explain the issues and recommendations.