Reference no: EM132838252

As part of the audit planning phase, the issue of a time budget for the completion of the audit is essential to allocate the hours and resources among the various sections of the audit file. Ima Genius is an audit manager who plans/hopes to become partner of the local firm and as such he feels that his ability to get audits completed within or under the budgeted time will enhance his opportunity to move into the partner role and the corner office that comes along with this role and a nice raise.

• One of the associate auditors on Ima's team is Greta Dogood, a recent Odette grad. Greta has been assigned by Ima to complete the cash handling cycle portion of the audit and has been assigned 15 hours to finish task. While Greta has strong audit skills, her completion of the task actually took her 25 hours due to the fact that the client had added 4 new cash accounts since last years audit. Realizing this was not a SALY situation (same as last year) she did her best to get this task completed on time but is concerned that she used 10 more hours than provided in her budget from Ima. So, instead of charging the full 25 hours to the cash handling cycle, she charged only 15 hours to it and then charged the other 10 hours to reviewing internal control flowcharts for the other sections of the audit.

Problem 1: What do you think of Greta's decision on how she charged the 25 hours? What other options did Greta have to address this situation?