Ethical Challenges and Agency Issues

Topics: Ethics, Business ethics, Public Company Accounting Oversight Board Pages: 3 (1246 words) Published: April 4, 2011
Budget Issues of Running Out of Money and Time
When an agent finds out that they are going overbudget or over the allotted time limit the most critical element is open communication. With open communication it gives management more advance warning earlier in the budget cycle to make changes that can get the project back on track. The most important element management needs is ample time to make corrections to keep the project on budget and within time constraints. The more time management has the better their chances are of getting the proper resources aligned to get the budget back under control. If the budget issues are due to the client not properly keeping records, the agency could word the contract in a way that allows provisions for adjustments which would enable the agency to form a financial or time resolution with the client. A contract that allows for those types of adjustments limits agency issues and will keep a better working relationship between the two parties. The main issue is deciding what party is responsible or accountable for an overbudget project. If the agency can demonstrate why the budget is off to the client and be able to charge extra for the additional work the agency could delegate more resources to get the project completed in time as well. It is critical for the agency to have open communication between its team members, but it is just as crucial for the agency to be honest with the client as well. The ethical issue that arises with being overbudget is that individual employees don’t want to be penalized or face repercussions for their performance so they delay reporting results to management. When employees are afraid to report shortfalls earlier in the process it can lead to higher costs and major agency issues. The sooner the agent can show the client that planning or reporting issues are occurring they can make vital decisions to get the project back in line. Employees need to objectively think about others...
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