In the case, Robert Lee, the partner-in charge of the engagement, made a decision to purchase the outstanding stock of Stewart International basing his decision on unaudited accounting records. Joseph Chang is in a dilemma whether to submit the audited accounting records which apparently does not reflect the 25% increase in earnings that has been reflected by the unaudited accounts which will make Robert and Charles stop reclaiming the company’s stock from members of the public or to go without reporting the audited accounts and leave Robert and Charles continue to repossess the outstanding stock.
Joseph Chang’s decision is multidimensional. It will affect the organization, himself, his family, the subordinates, the shareholders, Robert and Charles. However, he still has to take one option at the expense of the other. Both options will have effects on Stewart International and the various parties involved in the running and operations of the company. Putting myself in Joseph Chang’s situation, I would make a decision to report the audited financial records which are clearly audited in accordance with the Generally Accepted Auditing Standards to reveal the reality on the ground (Mintz, 59). I’ll do this to discourage Robert and Charles to stop making wrong decisions that detrimentally impact on the company. This might make me loose the job which will negatively affect family’s living standards. Despite the effect that this will have I will have to report exactly facts as they are as this is in accordance with the auditing principles and professional ethics. Failing to take this decision will result in members of the public loosing ownership in the company. This may negatively impact on the company’s overall performance in the stock market since the shares will not be pretty competitive. Failing to reveal the correct audited accounting records will continuously make investors to make wrong investment decisions.
It is my obligation to report things as they are and assist the management of Stewart International make realistic choices that will be beneficial to the company. Robert and Charles want me not to present the audited records as this will contravene the decisions that they have already made. They are also not likely to take any advice from me. However, I still find it necessary to present the audited records and advice Robert and Charles to stop violating the company’s values and obligations. Abiding by their wish will be a clear violation of my core values which are honesty and transparency. Having sufficient proficiency and experience as an auditor, personal virtues are being challenged by the presented scenario. It is unethical to sit back and watch as people do the wrong things either knowingly or unknowingly (Mintz, 124). Robert and Charles know very well that the company’s policy does not allow the management to purchase stock from members of the public so that they can earn dividends when the company grows. Such a culture is unacceptable and must be addressed accordingly.
Being under Robert lee’s supervision, coming up with an idea or report that clearly violates my personal interests will have dire consequences on me. However, acting as he wishes will create a sense of culpability since I will be quite sure of acting against my personal values and professional ethics as clearly stipulated in professional code of conduct. The correct accounting records must be presented and the audited records correctly interpreted.
Mintz, Steven M. Cases in Accounting Ethics & Professionalism. New York: McGraw-Hill Companies, 2007. Print.