1. What alternatives are available to Brent in regards to the audit of payables? What are the pros and cons of each alternative? * Skip audit steps
Pro: Skipping audit steps will allow Brent to complete the work in less time, allowing him to come in under budget
Con: Skipping audit steps can lead to inaccurate audit decisions. Misstatements could go unnoticed leading to an inaccurate audit opinion. This alternative also raises a serious ethical issue with serious consequences for the auditors. * Eating time
Pro: “Eating time” will mean a lot of extra “off-line” work for Brent, but he will come in under budget and he may be as a true asset to the company.
Con: “Eating time” will create inaccurate and tighter budgets in the future and a poor reflection of the actual cost of doing an audit. This may result in poor decisions at higher levels of management, especially if management is unaware of the time being eaten. * Do the job diligently but do it right and record how long it takes regardless if it comes in under budget or not. Pro: This gets the job done and no shortcuts are taken. Brent may receive a good reputation for not taking shortcuts. Con: Brent will come in over budget. He may receive a bad reputation for not finishing in the budgeted time, and may receive a poor performance evaluation. * Go to John's supervisor to discuss the situation and seek advice. Pro: This allows Brent to receive feedback on expectations from higher levels of management. If John’s plans violate management’s expectations, they may resolve the situation. Con: Going over a supervisor’s head without first speaking with that supervisor brings possible negative consequences, including the perception that Brent lacks good judgment in dealing with workplace issues. Brent’s reputation will suffer with John, and could suffer with others in the office as well.
2. What consequences for Brent, the auditing firm, and others...