Betty Crawford is a staff accountant for a local CPA firm. For the past 15 years, the CPA firm has given employees a year-end bonus equal to two weeks salary. On November 30, the firms management team announced that there would be no annual bonus this year. Because of the firms long history of giving a year-end bonus, Betty and her co-workers had come to expect the bonus and felt that the firm had breached an implicit agreement by discontinuing the bonus. As a result, Betty decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. The firm's policy is to pay overtime at 150% of straight time. Bettys supervisor was surprised to see overtime being reported, because there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the honor system in reporting their work hours.

Instructions:

Answer each question below in a way where you use at least 200 words to answer both questions ( NOT 200 words per question). After doing this, please respond to one of your peer's responses by using at least 100 words in your response.

1. Is the firm acting in an ethical manner by eliminating the bonus? Explain your answer.

2. Is Betty behaving ethically by making up the bonus with unnecessary overtime? Why?