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Case 8-1 Research Triangle Software Innovations (a GVV case) [The following information applies to the questions displayed below.] Research Triangle Software Innovations is a software

Case 8-1 Research Triangle Software Innovations (a GVV case)

[The following information applies to the questions displayed below.]

Research Triangle Software Innovations is a software solutions company specializing in enterprise resource planning (ERP) business management software. Located in the Research Triangle Park, North Carolina, high-tech area, Research Triangle Software Innovations is a leader in ERP software.

Oak Manufacturing is located in Raleigh, North Carolina. Oak is a publicly owned company that produces oak barrels for flavoring and storage of wine products. As the largest company of its kind in the Southeast, Oak Manufacturing serves all 50 states and other parts of North America.

Tar & Heel, LLP, is a mid-sized professional services firm in Durham, North Carolina. It provides audit, assurance, and advisory services to clients, many of whom are in the Research Triangle area. The firm audits the financial statements of Oak Manufacturing and was just contacted by the client to assist in selecting and implementing an ERP system so the company can improve its collection, storage, management, and interpretation of data from a variety of business activities.

Steve Michaels is Tar & Heel's advisory manager in charge of the Oak Manufacturing engagement. He is reviewing the criteria used for software selection as follows:

  • Alignment with client's needs
  • Operations integration
  • Software reliability
  • Vendor support
  • Scalability for growth
  • Pricing

Everything seems in order for the criteria. However, Steve is concerned about the selection of the ERP software of Research Triangle Software Innovations, for one, because Research Triangle is also an audit client of the firm. Given that Research Triangle is the major client in the Durham office, Steve worries about perceptions if the firm selects its client's software product. Moreover, he knows his firm's partnership is pushing for sales of its own software and this might be an occasion to do so.

Steve calls Rosanne Field into his office to discuss her selection. This is Rosanne's first job as the lead advisory staff member on a software selection decision. She has great credentials having graduated with a bachelor's degree from the University of North Carolina, a masters from North Carolina State, and a computer science doctorate from Duke University. She has five years of experience in advisory services and has received glowing evaluations.

Rosanne explains that there were four ERP software products that made it to the "final four," including the firm's own product. The others were Research Triangle Software Innovations, Longhorn Software Systems in Austin, Texas, and Tex-Mex Software in El Paso, Texas.

Steve asks Rosanne to explain why Research Triangle Innovations was selected over the firm's own package. She goes through the ranking of the criteria. It seems the total score for Research Triangle's software was slightly below that of Longhorn Software but significantly above Tex-Mex. Rosanne told Steve she never considered the firm's own package. Her selection of Longhorn Software was overturned by Gary Booth, the senior on the job, ostensibly because Gary saw it as an opportunity to gain additional services for the firm by making the client -- Research Triangle -- happy and earning a feather in his cap by bringing in additional revenue.

Steve is unhappy with what he has learned so he calls for a meeting with Rosanne and Gary later in the week. Put yourself in Rosanne's position and consider the following in developing a game plan for what you will say at the meeting and then answer the questions that follow.

Questions

  1. Describe the leadership style of Steve in this case.
  2. Assume Steve decides to support Gary's explanation for choosing the firm's own package. What will you do next?
  3. Have there been any violations of the AICPA Code of Professional Conduct in this case? Be specific.

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