The case study of Brent Dorsey
The options available to Brent do not seem easy at all. The option given by Megan is that Brent and Scott take just a little fewer invoices and other source documents as they did the past year. This option is based on the presumption that, since the company has always been right in the preparation of the payable accounts then they would still be right this time. This option has various weaknesses, key among them, and the fact that it relies upon assumptions. It is grossly wrong to assume that any company will prepare its accounts the same way it did the previous year (Rittenberg et al, 2011). This is the major reason why Brent is not so sure about the option. The advantages of this option however include the fact that Brent and Scott will likely finish their work in good time. This will let them to take a brief leave out of their busy careers so as to have time with their families. Another advantage of this option is the fact that in the event that the payables are indeed right as per the assumptions of Megan, then the two auditors would receive credit for having performed well and perhaps this would give them an upper hand in winning the promotion at the Portland branch. The second option available to Brent is the decision to “eat time” as per the suggestion of Scott. This option will entail doing the work partly on Saturday and keeping some for Monday. This way, they would be able to use more invoices and other relevant documents. Even so, this option is quite tiresome and time consuming. Taking up this option may mean that Brent and Scott delay with completion of their assignment. Again, this may cause them to lose the opportunity of promotion. Similarly, it may cause the clients to lose confidence in the auditors.
The consequences of the option to eat time are many and touch on all the parties to the audit engagement. Typically, an audit engagement involves the audit assistants, the audit firm, the client as well as the general public. Realistically speaking such delays would impact on Brent in many ways. The most adverse may be that he could probably be the one to be counseled out since Scott and Megan have worked there for quite some time. The option is likely to impact negatively on the reputation of Brent. The impact on the audit firm would be adverse considering that the clients will develop a negative attitude toward the audit firm. This may minimize the chances of future engagements. The impact of the option on the firm would be adverse, as well, considering that its professionalism and work competence would be compromised. It may bring internal conflict among the auditors. The option will as well impact negatively on the client, since the client will be behind schedule in releasing the final accounts. This may affect the company’s reputation among the prospective investors. This may as well not appear as appealing to the shareholders of the company. The ethical considerations in this option revolve around the auditor’s responsibility and duty of care. The Megan option will as well have negative impacts on all the parties to the audit engagement. To Brent, this option may increase his chances of missing the promotion. Similarly, it may cause him to be counseled out or transferred out of Portland, an option his wife Catherine is not ready to take kindly. To the firm, its reputation might be at stake and future considerations may be cancelled. This option may not give a true and fair analysis of the monetary dealings of the firm. The client as well as the prospective investors would be among the most disgruntled shareholders.
In my opinion, the best option would be Megan’s option. This option is of such nature that the work done will be incomplete but representative of the outcomes that would have been achieved if the auditors had used all the documents. This option therefore amounts to sampling since the auditors may have to randomly select the documents to be used. Random sampling is an audit technique concerned with the use of a few documents randomly selected from the available source documents. Worth noting is the fact that sampling is one of the most effective audit procedures (Rittenberg et al, 2011). Given that sampling saves time, it could be the most appropriate option for such auditors as Brent and Scott, who usually do not have time. Clearly, Brent has lost his social life. From the fact that he stopped his exercises to the reality that he has not had a satisfactory amount of time to even assist his wife Catherine with house duties despite the fact that she’s not well. Brent is lost in his career to the extent that he does not have even the time to have a problem in his car fixed. Sampling could be the most effective idea, as it would give him, at least, a few minutes to have a life. The ethical considerations in the case of Brent and his limited options include the fact that the auditor owes the client as well as other prospective investors a duty of care. It would be unethical to use the sampling alternative where the history of the firm is unknown. Since it is clearly established that the company has always prepared the books of accounts well for the past five years gives a high probability that this year will be right. I would, therefore, work with the belief that it is ethical to work with the few invoices.
The conflicting demands of work and family makeup a conflict that is referred to as the Work-life conflict. Also known as the work-family conflict, this is a social phenomenon that has affected the lives of many people in the corporate world (Rittenberg et al, 2011). Like John Peters and the other auditors in the firm, all people in such a demanding profession as auditing suffer a lot trying to strike a balance between one’s demanding job and the family. In an effort to eliminate or rather minimize the work-life conflict, John Peters and others should make attempts to schedule their time and activities in such a way that they can afford to work and have time for their families. This may mean that they should obtain all the necessary information in good time so as to schedule their working weeks. This may enable them work on the week days and have family time on the weekends. Alternatively, they can have policy changes made in the organization enabling the auditors to negotiate with the clients for flexibility in the event that information comes late. This may mean that the information coming late be handled for the remaining week and not over the weekend.
Rittenberg, L. E., Johnstone, K. M., & Gramling, A. A. (2011). Auditing. Mason, Ohio: South-Western.