Case Details:

You have worked as a staff auditor for two and one-half years and have mastered your job. You will likely be promoted to a senior position after this busy season. Your current senior was promoted about a year ago. He appreciates your competence and rarely interferes with you. As long as he can report good performance to his manager on things she wants, he is satisfied. The manager has been in her position for three years. She is focused on making sure audits run smoothly and is good at this. She is not as strong on the softer skills. Although she is approachable, her attention span can be short if what you are saying does not interest her. You are aware that she expects her teams to perform excellently during this busy season and she hopes to be promoted to senior manager as a result, bringing her closer to her goal of making partner early.

The audit engagement on which you are working has become increasingly difficult since last year because of some complicated accounting transactions that the client made. There has also been unexpected turnover in accounting personnel at the client. This has made interacting with the client and getting the information you need in a timely manner problematic. However, the engagement time budget and the audit fee remain the same as last years. Further, four staff auditors are assigned to the engagement, and there are no additional staff available to transfer in to ease the workload. Your senior now tells you that the manager has requested that you, he, and the other staff auditors do an additional analysis of a potential misstatement in one of the clients accounts. Even with your teams current workload, there is significant danger that the engagement will run over budget. You know that if you do the analysis thoroughly, it will further endanger meeting the time budget the manager had planned. The more time you spend on the engagement, the less profitable it will be for the audit firm, which clearly will displease the manager and her superiors.

As a group, the staff auditors discuss the situation and express their concerns regarding the perceptions that running over budget will create and the reputational issues that short-circuiting the analysis could create. When your senior stops by to discuss the new plan, the group raises its concerns. He talks to the group and implies that he would be satisfied if the team did either of the following: complete the analysis and simply not record the hours (doing so would prevent the reported audit hours from going too far over budget) or do a minimal job on the analysis, which would save time and avoid having to question the client too much. You and a few other staff members express discomfort with both of these strategies. It is suggested that the ramifications of the new order be made clear to the manager. The senior wants nothing to do with this. He says, She doesnt want to hear these details so just use one of the ideas I have already given you. When he leaves, several staff members start griping about what they are being asked to do. A couple say they are going to leave the firm after this busy season, so they dont really care about this issue. Another says, Weve been told what to do. Lets just get on with it.

Ethical Decision Making Model - Seven Step Process:

1. Step 1: Identify the ethical issue(s).

Make sure when you identify the one most important ethical dilemma that you are facing in this scenario.

2. Step 2: Determine at least 8 affected parties and identify their rights.

Who is affected by the outcome of the dilemma and how each person or group is

affected. Identify all stakeholders completely (including the person facing the ethical

dilemma) and how each stakeholder (or stakeholder group) is affected in general and

NOT how they are specifically affected by a particular course of action. This latter would

be a consequence and should be discussed in Step 5.

3. Step 3: Determine the most important rights.

Prioritize the various parties rights according to your opinion of their importance.

4. Step 4: Develop alternative courses of action.

Discuss at least 3 alternative courses of action that you might take in this scenario, including any unethical alternatives.

5. Step 5: Determine the likely consequences of each alternative identified in Step 4.

Make sure you label the consequences that go with each alternative noted in Step 4. Some alternatives may have multiple consequences.

6. Step 6: Assess the possible consequences, including an estimation of the greatest good for the greatest number. Determine whether the rights framework would cause any course of action to be eliminated.
7. Step 7: Decide on the appropriate course of action.

Make sure you justify your choice of alternative course(s) of action in this ethical dilemma.