Essay Ethics Case

937 Words Feb 27th, 2013 4 Pages
In this mini case Mike Stephan is dealing with a very difficult situation because he is new to the accounting firm and wants to impress the superior accountants on his engagement team. While auditing for EarthWear, he makes a little mistake by spending too many hours looking at the wrong bank statements when he is not supposed to go over a total of 6 hours. Pressured by the senior on the audit, he is caught between lying about his hours or telling the truth and going over budget on the audit, potentially causing the other accountants on the team to look bad professionally. The first alternative that I have learned about when addressing ethical issues as a staff auditor would be to talk to the senior on the team and tell him/her exactly …show more content…
This could lead to even more confusion for Mike if everyone on his engagement team is telling him to do something he believes is wrong. A downside to listening to the senior and lying about the hours would be that Mike acted unethically and went against the accounting code of ethics as well as his own. Lastly, a downside to telling the truth about the hours would be that Mike and the other accountants all receive a bad performance evaluation and the firm looks inefficient to the client. Also, the extra time spent working on the audit might make the accountants look less competent at doing their job.
The implications of “eating time” allows the firm to charge an audit at a certain amount of hours that looks good to the client, when in reality the accountants spent additional hours because the budget was not enough to truly complete the audit. For the firm this concept prevents an over-budget audit and the auditors are perceived at being great at their job (since time is money), which the accounting world prides itself on. Mike learned about ethics and how these situations might occur in real life. He knows that “eating time” is unethical and this one request by the senior could lead to a path of more unethical decisions being made down the road.
If Mike decides not to listen to Alex and records the accurate time spent on the cash audit, then he is saving himself and the firm from

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