Ethical Case Exercise

Bryan Longview has been working 6 months as a staff assistant for Barton & Barton CPAs. Currently he is assigned to the audit of Reyon manufacturing Company under the supervision of Charles Dickerson, an experienced audit senior. There are three auditors assigned to the audit, including Bryan, Charles, and a more experienced assistant, Martha Mills. During lunch on the first day, Charles says, It will be necessary for us to work a few extra hours on our own time to make sure we come in on budget. This audit isnt very profitable anyway, and we dont want to hurt our firm by going over budget. We can accomplish this easily by coming in a half hour early, taking a short lunch break, and working an hour or so after normal quitting time. We just wont enter that time on our time report. Bryan recalls reading the firms policy that working hours and not charging for them on the time report is a violation of Barton & Bartons employment policy. He also knows that seniors are paid bonuses, instead of overtime, whereas staff are paid for overtime and get no bonuses. Later, when discussing the issue with Martha, she says, Charles does this on all his jobs. he is likely to be our firms next audit manager. The partners think hes great because his jobs always come in under budget. He rewards us by giving us good engagement evaluations, especially under the cooperation attitude category. Several of the other audit seniors follow the same audit practice. Analysis approach

1. Obtain the relevant facts. 2. Identify the ethical issues from the facts. 3. Determine who is affected by the outcome of the dilemma and how each person or Group is affected. 4. Identify the alternatives available to the person who must resolve the dilemma. 5. Identify the likely consequences of each alternative. 6. Decide the appropriate action.