the end of the first day of audit work, James tells the audit team that they will all have to work extra hours each day. These extra hours are to be on the audit team members’ own time to make sure that the audit comes in on budget. The team was asked to come in early, take short lunches and stay late each day. Nancy remembered reviewing the company’s policies during her orientation. There is a policy against working hours and not charging them on the time report. It is considered
Nancy Watkins has been working for five (5) months as a staff member for Acme, CPAs. She is
currently working on the audit of Tampa Manufacturing Company. She is on a four-person audit
team that is supervised by senior auditor James King.
At the end of the first day of audit work, James tells the audit team that they will all have to work
extra hours each day. These extra hours are to be on the audit team members’ own time to make
sure that the audit comes in on budget. The team was asked to come in early, take short lunches
and stay late each day.
Nancy remembered reviewing the company’s policies during her orientation. There is a policy
against working hours and not charging them on the time report. It is considered a violation of
Acme’s employment policy. In addition, she knows that seniors are paid bonuses instead of
overtime.
When discussing this issue with the other auditors on the team, Nancy finds out that James does
this all the time. (Apparently, several other audit seniors follow the same practice as well.) As a
result of this practice, James is consistently completing audits under budget and is on his way to
becoming the next audit manager. To placate his audit team, James rewards each auditor with
good evaluations, especially under the category of cooperative attitude.
Is it ethical for Nancy to work extra hours and not report them?
3) Post to the Ethics Discussion Board including the following elements
1) What are the relevant facts?
2) What is the ethical dilemma?
3) Who are the parties affected by the outcome of this dilemma and how is each party
affected?
4) What are the alternatives available to resolve this dilemma and the consequences of
each?
5) What do you recommend as the most appropriate action?
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