Shortly after accepting an entry-level position on the auditing staff of a Big Six accounting firm, Leigh Ann Walker was assigned to work on the audit of Saint Andrew’s Hospital. While nervous about her first assignment, Ms. Walker was excited to be working under Jackie Vaughn, a third-year senior. Early in the engagement, Ms. Vaughn casually asked Ms. Walker if she had taken the CPA exam. Ms. Walker had in fact attempted the exam, but told Ms. Vaughn that she had not yet taken it. Ms. Walker was scared that she had not passed on her first attempt, and did not want to have to admit failure to her new superior. She completed the cash audit of Saint Andrew’s within budget, and thoroughly impressed Ms. Vaughn with her work. As the engagement came to a close, Ms. Walker received her results from the CPA exam; and much to her surprise, she passed all four parts. She called Ms. Vaughn with the exciting news, but Ms. Vaughn did not seem excited by the good news. In fact, she actually seemed disappointed and somewhat disturbed that Ms. Walker had lied about taking the CPA exam. Don Roberts, the office managing partner and Saint Andrew’s engagement partner, eventually contacted Ms. Walker regarding the issue. Much to her dismay, Mr. Roberts informed Ms. Walker that while her work was impressive, Ms. Vaughn and the rest of the audit partners were uncomfortable working with someone they could not trust. Due to her lack of integrity, Ms. Walker was fired within months of accepting her first job in the accounting field. This memorandum will discuss whether the termination of Leigh Ann Walker was unjust, or if her termination was justifiable according to authoritative Accounting and Auditing Standards. It will also discuss the general necessity for integrity in the Accounting profession.
The first issue in the case regarding Leigh Ann Walker is whether or not Ms. Vaughn reasonably handled the situation. One side of the argument is that Ms. Vaughn overreacted in the...
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