Opinion Shopping worried "We have had Paige & Gentry as our audi- really hard. You are a qualified accountant; tors for many years, haven't we, Jane? They how can we handle this?" have been here since I became president "Well, Bob, we could have some infor- two years ago." mal discussions with other auditors- "Yes Bob, I have been the CFO for maybe even the ones at your old seven years, and they were here before I companyto see how they would handle came. Why do you ask?" issues like these. The word will get around "Well, they were really tough on us to Bil, and he may be more accommodating during the recent discussions when we in the future and will probably shave his were finalizing our year-end audited proposed audit fee for next year when he statements-not at al like I was used to meets with our Audit Committee next at my last company. When we asked for a month. If you really wanted to play hardball, little latitude, our auditors were usually we could talk the Audit Committee into call- pretty obliging. Frankly, I'm a little ing for tenders from new auditors. After all this time, it's logical to check out the mar- "Why, Bob, we had nothing to hide?" "That's true, Janc, but let's look ahead. ket anyway. We would have advance dis- cussions during which we would sound We're going to have difficulty making our them out on how they would assess mate- forecast this year, and our bonuses are on the line. Remember, we renegotiated our riality in our company's case. Our audit salary/bonus package to give us a chance fee in getting pretty large-almost at higher incentives, and we have to be $50,000 this year-so some big firms will careful." be really interested." "Looking ahead, we've got a problem with "Jane, let's play hardball Get a list of obsolete inventory that's sure to come to audit firms together for the tender process, require discussion for a second year in a and I will approach the Audit Committee. row. We've got the warranty problem with Be sure to list some small fimms, including the dectrical harness on the mid-range Webster & Co., the firm auditing my old machine, which is going to cost us a bundle, company but we want to spread the impact over the next three years when the customers discover the problem and we have to fix it up. And don't forget the contaminated waste spill we just had-how much is that going to cost to clean up, if we ever get caught?" "These are potentially big ticket items. Bil Paige, the guy who is in charge of our audit, is not going to let these go by. He said the inventory problem was almost material this year, and we had to argue Use the information and perspectives you have been exposed to in the course (Accounting Ethics) and discuss all sides of critical issues