Audit Cases Essay

14217 Words Jan 18th, 2013 57 Pages
Professional and ethical issues c a S eS inc lu de d in t hiS Se ction

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3.1 A Day in the Life of Brent Dorsey
Staff Auditor Professional Pressures

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3.2 Nathan Johnson’s Rental Car Reimbursement
Solving Ethical Dilemmas–Should He Pocket the Cash? Recognizing It’s a Fraud and Evaluating What to Do

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3.3 The Anonymous Caller 3.4 WorldCom
The Story of a Whistleblower

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3.5 Hollinger International

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Realities of Audit-Related Litigation

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Con: “Eating time” will create inaccurate and progressively tighter budgets in the future, as the case suggests happened last year. “Eating time” also results in audit time records doing a poor job of reflecting the actual cost of doing the audit. This may result in poor decisions at higher levels of engagement management, especially if engagement management is unaware of the time being eaten. Many also see eating time as a serious ethical issue. Pro: This alternative gets the job done and no shortcuts need to be made. Brent may receive a good reputation for not taking shortcuts to get the job done. Con: Brent will come in over budget using this alternative. He may receive a bad reputation for not finishing segments in the budgeted time, and may receive a poor engagement performance evaluation from John. Pro: This alternative allows Brent to discuss the matter with John and get his feedback. Brent can be sure there are no misunderstandings of what John wants. Brent can express his concerns over the alternatives he’s faced with. John may be able to give some advice to help Brent legitimately complete the work (e.g., through valid substitutions of control reliance and analytical procedures or other less costly procedures) and still come in under budget. Con: John may see Brent as a threat to his promotion. This could lead to Brent receiving a poor performance evaluation, etc. Pro: This alternative allows

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