Kevin Lowe is depressed. He has been with the CPA firm
Stooges LLP for only three months. Yet the partners in charge of
the firm—Bo Chambers and his brother, Moe—have asked for a
“sit-down.” Here’s how it goes:
“Kevin, we asked to see you because your time reports
indicate that it takes you 50 percent longer to complete audit work
than your predecessor,” Moe said.
“Well, I am new and still learning on the job,”
replied Lowe.
“That’s true,” Bo responded, “but you have to appreciate that we
have fixed budgets for these audits. Every hour over the budgeted
time costs us money. While we can handle it in the short run, we
will have to bill the clients whose audit you work on a larger fee
in the future. We don’t want to lose clients as a
result.”
“Are you asking me to cut down on the work I do?” Lowe
asked.
“We would never compromise the quality of our audit work,” Moe
said. “We’re trying to figure out why it takes you so much longer
than other staff members.”
At this point, Lowe started to perspire. He wiped his forehead,
took a glass of water, and asked, “Would it be better if I took
some of the work home at night and on weekends, completed it, but
didn’t charge the firm or the client for my time?”
Bo and Moe were surprised by Kevin’s openness. On one hand, they
valued that trait in their employees. On the other hand, they
couldn’t answer with a yes. Moe looked at Bo, and then turned to
Kevin and said, “It’s up to you to decide how to increase your
productivity on audits. As you know, this is an important element
of performance evaluation.”
Kevin cringed. Was the handwriting on the wall in terms of his
future with the firm?
“I understand what you’re saying,” Kevin said. “I will do better in
the future—I promise.”
“Good,” responded Bo and Moe. “Let’s meet 30 days from now and
we’ll discuss your progress on the matters we’ve discussed today
and your future with the firm.”
In an effort to deal with the problem, Kevin contacts
Joyce, a friend and fellow employee, and asks if she has faced
similar problems. Joyce answers “yes” and goes on to explain she
handles it by “ghost-ticking.” Kevin asks her to explain.
“Ghost-ticking is when we document audit procedures that have not
been completed.” Kevin, dumbfounded, wonders, what kind of a firm
am I working for?
Questions
1.
Kevin is not a CPA yet. What are his ethical obligations in this
case?
2.
Given the facts in the case, evaluate using deontological and
teleological reasoning whether Kevin should take work home and not
charge it to the job. What about engaging in ghost-ticking?
3.
What would you do if you were Kevin and why? How would you explain
your position to Bo and Moe when you meet in 30 days?
1. Though Kevin is not a CPA but still he is trying his best of the ability. He should bring out the best practice applied in the organisation. He should well understand the past things and brings it into the table of partners so that they can also understand how things were working.
2. Kevin should not take work home though he can sit late. One should not make a habit of taking work to home because it may hamper his personal life as well. Engaging in ghost ticking is also not ethical in audit. This can bring the bad reputation of the firm in future. He should bring this habit of other employees to partners of the firm.
3. If I would have been in Kevin's place I would have planned my day to day work and then conducted the audit. Should have completed my daily task in office rather then taking it to home. After 30 days I would have explained partners with the help of past things done by ghost ticking.
Kevin Lowe is depressed. He has been with the CPA firm Stooges LLP for only three...
Case 1-7 Eating Time Kevin Lowe is depressed. He has been with the CPA firm Stooges LLP for only three months. Yet the partners in charge of the firm-Bo Chambers and his brother, Moe-have asked for a sit-down." Here's how it goes: “Kevin, we asked to see you because your time reports indicate that it takes you 50 percent longer to complete audit work than your predecessor," Moe said. "Well, I am new and still learning on the job," replied...
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