Question

or future as she e her Master of it staff of Green Discuss whenici un Professional Conduct. If so, identify the nature UI LUI 4-29 (OBJECTIVES 4-2, 4-7) Barbara Whitley had great expectations about her future sat in her graduation ceremony in May 2015. She was about to receive her M Accounting degree, and next week she would begin her career on the audit staff of Thresher & Co., CPAs. Things looked a little different to Barbara in February 2016. She was working audit of Delancey Fabrics, a textile manufacturer with a calendar year-end. The proces was enormous. Everyone on the audit team was putting in 70-hour weeks, and it co looked as if the audit wouldn't be done on time. Barbara was doing work in the pro erty area, vouching additions for the year. The audit program indicated that a sample of all items over $20,000 should be selected, plus a judgmental sample of smaller items When Barbara went to take the sample, Jack Bean, the senior, had left the client's office and couldn't answer her questions about the appropriate size of the judgmental sample Barbara forged ahead with her own judgment and selected 50 smaller items. Her basis for doing this was that there were about 250 such items, so 50 was a reasonably good propor- tion of such additions. Barbara audited the additions with the following results: The items over $20,000 contained no misstatements; however, the 50 small items contained a large number of misstatements. In fact, when Barbara projected them to all such additions, the amount seemed quite significant. A couple of days later, Jack Bean returned to the client's office. Barbara brought her work to Jack in order to apprise him of the problems she found and got the following response: "Gosh, Barbara, why did you do this? You were only supposed to look at the items over $20,000 plus 5 or 10 little ones. You've wasted a whole day on that work, and we can't afford to spend any more time on it. I want you to throw away the schedules where you tested the last 40 small items and forget you ever did them."

Answer 1

Answer:

a.Yes It is ethical dilemma for Barbara because her senior does rationalization of unethical behavior and it is likelihood of discovery and consequences of material mistakes in the Audit Report.

b.Use the six-step approach

Facts -

1.The audit program indicated that a sample of all items over $20,000 should be selected, plus a non-statistical sample of smaller items.

2. Barbara misstatement addition small items

3. Barbara’s senior responded about her mistakes by told her to forget about it.

Facing ethical dilemmas by Businesspeople or while audit procedures are very common these days; however, how one chooses to resolve the situation is critical. At TPC, a six-step approach has been used very successfully. They are these:

1. Obtain the relevant facts.- Barbara shall obtain relevant facts about the sampling error occured.

2. Identify the ethical issues form 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 consequence of each alternative.

6. Decide the appropriate action.