Main Ethical Dilemmas Raised in GVV Scenario: Giving Voice to Values Application Assessment Task 1 Answer
Facts of the case:
In the given scenario, Steve is a qualified auditor who has the CPA certificate and working in the Ryan & Associates, CPAs. In the busy month of return filing and auditing, his managing partner, Marcia has assigned him the audit work of a non-profit organization known as Helping Our Children (HOC). Steve was already engaged into the auditing work of Pogo Retail, Inc due to which he could not begin the audit work of HOC. Due to the high pressure from the executive director of HOC, Marcia assigned the audit work of HOC to Abby, who has joined the office as an intern before a few days. Also, Abby has worked in the HOC as apart time bookkeeper before and the books of HOC which are proposed to be checked was prepared by her (Johari, Mohd‐Sanusi, and Chong, 2017). Marcia assigned the audit work to Abby by believing that she already knows the client which helps her to wrap the work easily and appointed Steve as her senior. Also, Marcia strictly told Steve to not have sing of Abby on any of the workpaper. In that case several ethical and professional arguments and crisis may occur which are mentioned hereunder.
The dilemma occurred here is related to the ethics which should be maintained between the client and service provider for the accuracy of records and information. The process of audit covers an official inspection of books of accounts by an independent individual or body. Hence to get audited the accounts of HOC by Abby cannot actually considered as an audit. There is an assumption that a person cannot audit his own work in a way than the other does hence the audit of own work can be regarded as recheck but not an audit. The books of HOC was prepared by Abby hence she would not be able to find mistakes and unfairness in her own work which could cause an unfair audit result (Bangun, and Asri, 2017). In addition to that, Steve was entitled as a senior of Abby which make him liable for the performance of Abby hence the mistakes done by Abby would directly influence the liability of Steve in that case. Also, it could cause harm to the goodwill of Ryan & Associates on the revelation of fact that the audit has been done by Abby who was a part of HOC before. Therefore, this scenario has put Steve into an ethical dilemma that whether it is right to get the audit done by Abby or not.
Reasons and rationalizations:
There are different reasons which can be countered for an argument in the given scenario of ethical wrong. The main argument which can be raised is whether Abby would perform fair while finding her own mistakes in the books of accounts of HOC or will she avoid them. Also, Abby is an intern who just joined the office a few days ago, so, it would not be appropriate to assign the whole work of audit of an organization to her. She has the more chances to make mistakes rather than Steve who has long experience in the auditing work. Further arguments can be made regarding the accuracy of audited accounts (Barrainkua, and Espinosa-Pike, 2018). Generally, the person signed the audited documents to ensure the client about the fairness and accuracy of audited books but here in the given scenario, Abby was not allowed to sing the documents. Hence, Steve cannot ascertain the fairness of audited books just by signing them as he has not audited them in real.
In organisation, there are some key stakeholders or parties which has the direct or indirect impact of every happening in the organization. Here in the given case, the executive director and other coordinators of HOC will get influenced with the results of the audited books. Hence, they may raise the objections on the finding of fact that the books of HOC has been audited by Abby. They can raise the objection regarding the professional ethics by stating their books was audited by an intern of Ryan & Associates who hardly have an audit experience (Ismail, and Yuhanis, 2018). Further they can object the accuracy of audit work which is done by Abby because the books were also prepared by her and rechecking her own work does not meet the purpose of audit.
Arguments made by Respondent:
In case of objections and arguments raised by the key parties of organization, Steve may also raise some argument to influence the management of Ryan & Associates or Marcia. He can argue that the fairness of accounts which are audited by Abby cannot be held accurate with the sign of Steve or any other senior auditor. To find that the information and figures of audited books are true and fair, the auditor has to check the accounts at his own. Also, as per the rules of audit, an individual is not allowed to audit and certified the accuracy of his own prepared financial books of accounts (Hess, Haney, and MacPhail, 2017). However, an internal audit can be made by the employees of organization but in the given case, the concerned audit is assigned to be done by the Ryan & Associates.
Powerful and persuasive response:
In the given case law, the most powerful and persuasive response, which could be made by Steve is related to the ethics of his profession. He may present his arguments before the management of Ryan & Associates or Marcia by stating that Abby should not be assigned with the task of audit for HOC. Such action of Ryan & Associate may cause the breach of professional code and ethics by it towards the client. Steve should represent his claims against such action, before the audit get done by Abby for avoiding the situation of ethical dilemma (Dewi, and Dewi, 2018).