Ethics Case

942 words 4 pages
In this mini case Mike Stephan is dealing with a very difficult situation because he is new to the accounting firm and wants to impress the superior accountants on his engagement team. While auditing for EarthWear, he makes a little mistake by spending too many hours looking at the wrong bank statements when he is not supposed to go over a total of 6 hours. Pressured by the senior on the audit, he is caught between lying about his hours or telling the truth and going over budget on the audit, potentially causing the other accountants on the team to look bad professionally. The first alternative that I have learned about when addressing ethical issues as a staff auditor would be to talk to the senior on the team and tell him/her exactly …show more content…
This might cause the engagement team to be scorned on working more efficiently, but it is more important for all parties involved that the firm upholds integrity in all situations.
It is clear that eating hours is wrong and possibly illegal, so the last alternative to record the accurate time spent auditing cash is the best choice for Mike. It is clear that this firm has a lack in controls since both the manager and senior were pressuring Mike to do the wrong thing. The superior accountants might learn from Mike and realize that what they were asking him to do was unethical. Also, the firm will not get caught for lying so their reputation will remain undamaged to this client as well as the rest of the audit goes well.
If I was in this situation I would have been very scared to stand up to the senior and manager and go against what they asked me to do. However, I would know that by “eating time” I was putting my job in jeopardy since I would be the one to blame because it was my additional hours of work that I chose to ignore in my report. The Professional Code of Ethics for accountants is something that is drilled into all CPA’s especially since the Sarbanes-Oxley Act of 2002. It would be difficult to allow myself to cheat on recording my hours when I have learned all of the consequences of being unethical in the accounting

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