Ethics in Accountancy Case Analysis

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Ethics in Accountancy Case Analysis
Case 2-5: Eating Time

1. Frame the ethical issue: Should Kevin Lowe “eat time” by taking work home and not record the time? 2. Gathering all the facts: * Kevin Lowe is a new staff accountant at Stooges LLP * Kevin took 50% longer to complete audit work than his predecessor. * Stooges LLP is on a fixed budget for these audits. * Bo Chambers and Moe Chambers are partners supervising Kevin. * Bo and Mo explicitly say that they do not want Kevin to cut down on the work he does. * Bo and Mo will not directly tell Kevin to “eat hours”. * Bo and Mo do explicitly say that it is up to Kevin to decide how to increase his productivity. * Bo and Mo also imply that completing work within budget is an important element of performance evaluations. * All major accounting firms have explicit policies against “eating hours”. * “Eating hours” has been a pervasive problem in the accounting industry for many years. * By “eating hours” Kevin will be contributing to inaccurate budgeting for his audits. 3. Identify the Stakeholders and obligations: * Kevin Lowe – a. Perform his job professionally and competently. b. Honestly report his hours as specified in work rules as a staff accountant. c. Do his best at Stooges LLC and try to get promotions and raises. * Bo and Moe – d. Manage staff and workload to achieve budget goals for the audit. e. Provide good ethical leadership to the audit team. f. Communicate clearly goals, expectations and work standards to staff. g. Provide good advice and guidance for staff that are not meeting standards. * Stooges LLC – h. Provide a competent professional audit at a reasonable price for clients. i. Provide clear guidelines of professionalism for time-reporting to employees. j.…...

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