Question

In this mini-case you will read about a Willis and Adams staff auditor who is confronted with an ethical challenge. You will then evaluate what he should do, and what you would do in a similar situation. Read the background information about Mike Stephan, a first-year Willis and Adams staff auditor who is confronted with an ethical challenge (find in the comment section below).

Complete the following questions using the background information provided in the document under Part 1.

a. List at least three alternatives available to Mike?

b. What are the pros or potential upside of each alternative you listed above?

c. What are the cons or potential downside of each alternative?

d. What are the implications of "eating time" for Mike, the firm, and others involved?

e. Alternatively, what are the implications if Mike decides not to follow Alex's advice and record the accurate time spent on the cash audit?

f. In your opinion, which of Mike's alternative courses of action would provide the best outcome and why?

g. How would you handle the ethical issues involved in this situation?

Answer 1

   List at least three alternatives available to Mike?  
   Mike has several alternatives to choose from. One alternative is Mike can do what Alex asked him to do and eat the lost time. Afterall, only Mike and Alex know what has happened. Another alternative is Mike can record the actual time it took and express to Alex how he felt uncomfortable with eating the time. Finally, Mike could talk to Dianne about the situation, since she is the person who will be affected with his choice.   
      
   What are the pros or potential upside of each alternative you listed above?  
   There is a potential upside with each alternative. For alternative one, Mike will please Alex and Alex will know that Mike will do what is asked of him. Also, Dianne will be happy with Mike because he finished on time which will lead to a good evaluation for both him and Alex. For alternative two, since Dianne placed pressure on Alex, she might come to realize that placing pressure does not get you the results requested. Other's might follow and realize that pressure is not good as well. Also, young staff might gain additional respect from seniors, and take notice that his schooling taught him well. For the last alternative, Dianne may understand and appreciate Mike's rightiousness. This may lead to more time to do the cash account.  
      
   What are the cons or potential downside of each alternative?  
   There is a potential downside with each alternative. For alternative one, Alex and the other seniors will continue to pressure the staff. There would be not be an example set forth for them to realize what happens when there is pressure put in place. Also, since the historical audit sets the standard for the future budget, by marking six hours, this will be in the budget for next year. For alternative two, Mike is subject to a bad evaluation which puts his employment in jeopardy. Furthermore, Alex may start to resent him for not doing what was asked. Additionally, this may make his schooling look bad because it took him so long to complete his job. For alternative three, Dianne may not like what Mike has to say and still pressure him like Alex did. Then Alex will resent Mike for talking to Dianne behind his back. This alternative also puts Mike's employment in jeopardy.  
      
   What are the implications of "eating time" for Mike, the firm, and others involved?  
   By "eating time" implications are made for Mike, the firm, and other involved. For Mike, if another ethical challenge presents itself, his standards for a decision may be low. He will use the choice of "eating time" as a determinate for the future. For the firm, the six hour time crunch, may become a standard for future similar jobs. This just sets up future staff auditors to fail and creating a never ending circle of this ethical challenge. Also, if future staff auditors keep failing, the firm may start to believe that hiring from small schools like Mike's is a bad idea.   
      
   Alternatively, what are the implications if Mike decides not to follow Alex's advice and record the accurate time spent on the cash audit?  
   If Mike decides not to follow Alex's advice and records the acccurate time, Mike may get a bad evaluation. If he gets a bad evaluation his perfomance reputation will be tainted, as well as his schooling. However, Mike's integrity will be known to Management and they will know he is trustworthy. Furthermore, the correct buget time will be allotted for similar jobs which will benefit future staff. Finally, Dianne will not get the promotion she was hoping for, but one must consider that there will be other opportunities for promotion.  
      
   In your opinion, which of Mike's alternative courses of action would provide the best outcome and why?  
   In my opinion, I believe Mike should write down the actual time it took him to complete the cash account job. By doing so Mikes integrity remains intact, as well as the firms. If Mike does lose his job, he will internally know that he did the right thing. He is setting up his career for success because other firms will realize his moral standards, which will make him a good auditor.   
      
   How would you handle the ethical issues involved in this situation?  
   If I were in Mike's shoes, I would record the accurate time. I would explain to Alex that I was not ethically comfortable with "eating time." I will also talk to Dianne about the situation and explain to her what happened. I would apologize for the time I wasted by not checking the dates and assure her that it will not happen again. I will also stand my ground if Alex and other coworkers look down on me.