A Day in the Life of Brent Dorsey Essay

799 Words May 4th, 2013 4 Pages
Case 3.1 A Day in the Life of Brent Dorsey
1. What alternatives 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 allow Brent to complete the work in less time, allowing him to come in under budget
Con: Skipping audit steps can lead to inaccurate audit decisions. Misstatements could go unnoticed leading to an inaccurate audit opinion. This alternative also raises a serious ethical issue with serious consequences for the auditors. * Eating time
Pro: “Eating time” will mean a lot of extra “off-line” work for Brent, but he will come in under budget and he may be as a true asset to the company.
Con: “Eating time”
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Eating time can lead to inaccurate budgeting for future audits. As managers prepare the budget for an audit, often use prior years’ audits as a guide. They see that the job was completed in a shorter time in previous years and prepare their budget accordingly. Accountants on future audits will have to complete audit segments in less time than is realistic, and this can become a cycle, with each year’s budget becoming tighter and less realistic. This can cause stress and problems for future accountants. In the end, eating time is dishonest in that it is an action intended to deceive the users of the time budget report. Skipping audit steps can have very serious consequences. By not completing the audit steps, material misstatements may slip past the auditors. The auditors may then issue an inappropriate audit opinion, which can be very costly. Skipping audit steps is the best evidence for the lawyers.

3. In your opinion, which of Brent’s alternative courses of action would provide the best outcome and why? What should Brent do? How would you handle the ethical issues involved in this situation? Brent should talk to John first, and tell him about the situation. There may be some things John could do to relieve the budget pressure. If John is unable to give advice, Brent can talking to the manager above John. Brent should do his best to get the work

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