Is marge behaving in an ethical manner

Reference no: EM13900407

Marge McMaster is a certified public accountant (CPA) and a staff assistant for Tester and Morris, a local CPA firm. The firm's policy had been to provide a holiday bonus equal to two weeks' salary to all employees. The firm's new management team announced on November 25 that a bonus equal to only one week's salary would be made available to employees this year. Marge 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, Marge 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. Tester and Morris's policy is to pay overtime at 150% of straight time.

Marge'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.

Discuss whether the firm is acting in an ethical manner by changing the bonus. Is Marge behaving in an ethical manner?

Reference no: EM13900407

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