Reference no: EM131496572

Ethics in Accounting

Barbara is working on the audit of a client with a group of five other staff-level employees. During the audit, Diane, a member of the group, point out that in the client's inventory system that she did not discover during the physical observation of the clients inventory. The deficiency was frelatively minor, and perhaps that is why it was not detected at the time. Babara suggests to Diane that they bring the matter to Jessica, the senior in charge of the engagement. Diane does not want to do it because sshe is the ont who identified the deficiency and she is the one who should have detected it at the time of the observation. Three of the other four staff members agree with Diane. Haley is the only one, along with Babara, who wants to inform Jessica.

After an extended discussion on the matter, the group votes and decides not to inform Jessica. Still, Barbara does not feel right about it. She wonders : What if Jessica finds out another way? What if the deficiency is more serious than Diane has said? What if it portends other problems with the client? She decides to raise all these issues but is rebuked by the others who remind her that the team is already behind on its work and any aditional audit procedures would increase the time spent on the audit and make the all look incompetent. They remind Barbara that Jessica is a stickler for keeping to the budget and any overages cannot be billed to the client.

Questions

1. Discuss these issues from the perspective of Kohlberg's model of moral development. How odes this relate to the establised norms of the work group as you see it?

2. Assume you are in Barbara's position. What would you do and why? Consider the following question:

a. How can you best express your point of view effectively?

b. What do you need to say, to whom, and in what sequence?

c. What do you expect the objections or pushback will be and, then, what would you say next?