Farid scratched his chin and could not prevent his thoughts from swirling inside of his head. He felt so anxious that he had to focus on breathing in and out to prevent himself from hyperventilating. He could not believe that his dream job was turning into a nightmare. It is amazing how much things can change in a year Farid thought. He was on cloud nine when he beat out 2,500 candidates to land a senior associate position at PwC. This position provided Farid with all the necessary work experience that he needed to get his CPA designation. After passing the CFE, the required work experience was the last hurdle that he needed to jump over to earn his designation.

At first Farid loved working at PwC. His manager Tisha was a no-nonsense type of a manager. She had high expectations of her staff, but she was fair and always had their back. Farid still remembered his first assignment under her. Tisha supported his decision on the inventory write offs the client needed to do even though the client fervently objected the amount and threated to fire them.

Now Farid wondered whether he could trust Tisha. His team was currently working on the Pigeon Bank audit and the pressure was escalading by the moment. Pigeon Bank was set to merge with Dove Bank, so it was important to ensure the integrity of their financial statements. Pigeon Bank and Dove Bank were the two largest banks in Canada and their merger would result in a bank that served half of the Canadian population. Due to the merger, the team felt extra pressure to complete the audit quickly and examine the financials with a fine-tooth comb. There was a lot at stake on the success of the merger. It took the CEOs of the two banks five years to convince the prime minister of Canada to approve the merger. However, in the end they were able to persuade the prime minister that the risk of a banking monopoly was less detrimental than the risk of Canadian banks not being able to compete in the global market.

Farid was responsible for reviewing Pigeon Banks revenue. It was a very intimidating task as the bank was involved in many complex international transactions. Trying to unravel these transactions was like trying to pull apart a ball of twine after a cat played with it. The more data Farid uncovered, the more research he needed to do and the more questions he had to answer.

The bank was involved in equity trading and a large portion of their revenue came from futures and options. Based on his reading and analysis, Farid believed that Pigeon Bank was overestimating their revenue and recognizing it too early.

With the imminent merger of the banks, Farid decided to discuss these transactions with Tisha rather than speaking directly to Pigeon Banks controller who was busy with merger related issues. Tisha read Farids research and recommendations but rather than support him like she had in the past, she told him that he was misinterpreting the accounting standards. She provided him with a vague explanation about why the banks revenue recognition approach was justified and told him to proceed to another part of the audit. Tisha also told him that the audit partner, Jack was pushing her to complete the audit ASAP and they didnt have time to look for skeletons in the closet that didnt exist.

At first Farid agreed with Tisha but now he was having doubts about her dismissing his interpretation of the accounting standards. He knew that he was just a recent graduate, but he thoroughly researched futures transactions and how they should be assessed. It appeared that the bank was being overly aggressive both about the amount and timing of the revenue that the futures would generate.

It was ironic but Farids doubts about Tishas instructions only arouse after what he saw last week. Farid was working late last week in Pigeon Banks office and he accidently caught the audit partner Jack in a steamy embrace with the banks CFO Caihong. Luckily, Jack and Caihong were too busy kissing that they didnt notice Farid but Farid couldnt get the image of them together out of his mind. He didnt know if Tisha knew anything about Caihong and Jack and whether this relationship was the reason that Tisha disagreed with Farids revenue recognition interpretations. Farid was very confused and did not know what to do.

Identify the ethical dilemma facing the decision maker. Explain the ethical dilemma in abstract terms and how they pertain to this particular situation.