1. What options are available to Brent in regards to the audit of payables? What are the pros and cons of each alternative? * Skip audit steps Pro: Skipping audit steps will enable Brent to complete the work in less time, allowing him to come back in beneath finances Con: Skipping audit steps can result in inaccurate audit choices. Misstatements could go unnoticed leading to an inaccurate audit opinion. This different additionally raises a critical ethical issue with severe consequences for the auditors. * Eating time
Pro: “Eating time” will imply plenty of additional “off-line” work for Brent, but he will are available under finances and he may be as a true asset to the corporate.
Con: “Eating time” will create inaccurate and tighter budgets sooner or later and a poor reflection of the particular cost of doing an audit. This might lead to poor selections at higher ranges of management, especially if administration is unaware of the time being eaten. * Do the job diligently but do it proper and record how long it takes regardless if it comes in under finances or not.
Pro: This gets the job done and no shortcuts are taken. Brent might receive a great status for not taking shortcuts.
Con: Brent will come in over budget. He may receive a bad status for not ending in the budgeted time, and may receive a poor performance evaluation. * Go to John’s supervisor to discuss the situation and seek advice. Pro: This permits Brent to receive feedback on expectations from higher levels of management.
If John’s plans violate management’s expectations, they may resolve the situation. Con: Going over a supervisor’s head with out first speaking with that supervisor brings potential unfavorable penalties, together with the notion that Brent lacks good judgment in dealing with office issues. Brent’s popularity will endure with John, and will undergo with others in the office as properly.
2. What penalties for Brent, the auditing agency, and others involved, might come up from “eating time,” as Scott suggested? Similarly, what penalties for Brent, the auditing agency, and others involved, may arise from not completing audit procedures, as Megan suggested?
Eating time can result in inaccurate budgeting for future audits. As managers put together the finances for an audit, usually use prior years’ audits as a guide. They see that the job was completed in a shorter time in earlier years and put together their finances accordingly. Accountants on future audits should complete audit segments in less time than is realistic, and this will turn out to be a cycle, with each year’s budget changing into tighter and fewer practical. This could cause stress and issues for future accountants. In the tip, consuming time is dishonest in that it is an action meant to deceive the users of the time price range report.
Skipping audit steps can have very severe consequences. By not finishing the audit steps, material misstatements might slip previous the auditors. The auditors might then issue an inappropriate audit opinion, which may be very expensive. Skipping audit steps is the most effective evidence for the lawyers.
3. In your opinion, which of Brent’s various programs of action would supply one of the best consequence and why? What ought to Brent do? How would you deal with the ethical issues concerned in this situation?
Brent ought to discuss to John first, and inform him about the scenario. There may be some things John might do to alleviate the price range stress. If John is unable to offer recommendation, Brent can speaking to the supervisor above John. Brent ought to do his greatest to get the work done throughout the budgeted hours, but mustn’t minimize corners. If he is available in over price range, he knows he did the proper thing. Many companies reward people who get up for moral conduct and look down on either premature sign-off or consuming hours.
4. What may John Peters and the other auditors do to raised handle the calls for of career and household life? He is in a difficult position, he’s being evaluated for a promotion and feels he must make an excellent exhibiting. The Northwest audit is a crucial audit for the agency, so he feels a greater have to do well on the audit however he is responsible for his coworkers work. John ought to discover better alternatives to serving to the employees get back on budget. If there aren’t any ethical options, honesty is the most effective plan of action.
Brent, Megan, and Scott are experiencing pressures that many face within the office. New professionals adjusting to the pressures of labor need to find methods to steadiness the competing calls for on their time and vitality. They want to make sure they’re investing the appropriate amount of time each week in other areas of their lives, corresponding to family and friends.