Reference no: EM132741899

Suzanne Thompson is a certified public accountant (CPA) and staff accountant for Deuel and Soldner, a local CPA firm. It had been the policy of the firm to provide a holiday bonus equal to two weeks' salary to all employees. The firm's new management team announced on November 15 that a bonus equal to only one weeks' salary would be made available to employees this year. Suzanne thought that this policy was unfair because she and her coworkers planned on the full two-week bonus. The two-week bonus had been given for 10 straight years, so it seemed as though the firm had breached an implied commitment. Thus, Suzanne decided that she would make up the lost bonus week by working an extra six hours of overtime per week over the next five weeks until the end of the year. Deuel and Soldner's policy is to pay overtime at 150% of straight time.

• Suzanne's supervisor was surprised to see overtime being reported, since there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, since firm employees are on the "honor system" in reporting their overtime.

Problem 1: Discuss whether or not the firm is acting in an ethical manner by changing the bonus. Do you think Suzanne is behaving in an ethical manner? Explain