Introduction
There are situations that occur in the workplace that we are forced to choose between bad and worse options. Ethical dilemmas in the workplace are major challenges for every employee, and dealing with them is a major struggle. This paper seeks to apply the six steps approach to address an ethical dilemma faced by an employee in an audit firm.
Relevant facts
According to the auditing guidelines given by the PCAOB, the documentation of an audit that has been carried out must be completed and submitted within 45 days (Arens, Elder, & Beasley, 2013). It concerns any publicly traded client.
The guidelines also rule that any additional documentation that will be attached to the audit after the stipulated deadline must indicate the date of completion. Other additional information, such as the preparers’ signature and the purpose of inclusion, must also be indicated (Arens et al., 2013). Auditors are prohibited from changing or altering the original audit document.
The audit report must be submitted in its original format without any form of modification by the audit teams as required by the PCAOB guidelines (Arens et al., 2013). PCAOB inspections are very effective in identifying serious audit deficiencies (Arens et al., 2013). If there will be deficiencies identified by the PCAOB, the partner who is a new and a prospective appointee will suffer image damages. The audit deficiencies will make him/her look bad, and he/she may face very serious penalties from the firm as disciplinary measures.
Ethical issues from the facts
The ethical issue, in this case, is very clear and conspicuous when one reads the text carefully. Ann, who is eyeing for a promotion to become a partner, is faced with a challenge where she has to make one choice from two difficult options. Apparently, she was recently recommended for promotion, and now she has been asked to exercise the full operational power of an officeholder as a partner.
The dilemma, in this case, is choosing what to do, whom to offend, and what values to uphold. The necessity to decide is the most important thing to do in this situation, and it is a very difficult position for Ann. Her partner is adamant, which means she should overlook the guidelines and influence the audit to reflect an outcome that will be good for both her career and the company. But it is despite Ann’s protest that was against the guidelines.
Nonetheless, both situations have an impact on her career. Ann has to decide whether she will stick to the auditing guidelines as provided by the PCAOB guidelines or not (Arens et al., 2013). In an ethical situation as the one presented in this case, one can easily make a wrong decision that can affect him or her in the future.
Who is affected by the outcome of the dilemma?
In these issues, the dilemma will affect two parties, the company, and Ann, the partner responsible for making the audit report look good. If Ann follows the guidelines in general, she will then date the additional information accordingly, and the dates will reflect the actual date when the information was added. However, when she makes such a decision, she will be exposing the entire firm to auditing scrutiny that may expose serious audit deficiencies (Arens et al., 2013).
It will affect the firms’ credibility, and the entire company will suffer. As a result, people will be released publicly. Therefore, the firm’s reputation is at stake with regard to the outcomes of this dilemma. On the other hand, if she will follow the instructions her partner suggested, the company’s reputation will be salvaged.
However, she will fail an integrity test since she is a practitioner, and she is expected to uphold the anticipated conduct of a professional. It may seem to be the best decision, but it has serious implications from both the firm and the PCAOB.
Her partner assured her that nobody would ever know. Nonetheless, if any way, her actions are noticed, she will have a great problem with PCAOB (Arens et al., 2013). In addition, her actions can be used to prove that she is not fit for the office when the final appointment to her promotion is made. If she can influence the outcome of an audit to protect herself and the company, it means she can also do the same for self-gain when an opportunity comes.
Alternatives available for resolving the dilemma
There are no good alternatives in this case since every decision has its implications. However, it is important to note that there are alternatives, no matter how bad they might turn out for Ann and the firm. Resolving this dilemma will require one party to take responsibility and be ready to suffer the ensuing consequences. There are two main alternatives in this case, and both are to affect Ann’s career.
The first alternative for solving this dilemma is to abide by the regulations and professional guidelines. The other alternative is to make changes to the additional information so that the dates correspond with an earlier date instead of the actual one. It will protect the firm’s reputation, and the partners will avoid possible fines due to a negative audit outcome.
Consequences of each alternative
Being a case of professional auditing, there are guidelines that Ann is supposed to follow. However, if she adheres to the guidelines as she is supposed to do, there will be consequences that will influence her career, and the oncoming promotion will be at risk. On the other hand, if she decides to alter the audit documents against the PCAOB guidelines, she will be compromising her integrity as a trusted and ethical worker/employee.
Appropriate action
In my opinion, upholding the PCAOB’s guideline is the best option for Ann in this case (Arens et al., 2013). It is considering the fact that she was invited as an acting officer. She has not assumed the position yet, and she has not been promoted as a partner. Therefore, the firm might consider overlooking her liability if the audit report’s outcome is negative. At the same time, her integrity is at risk if she is seen to be capable of committing unauthorized deals.
She could be under scrutiny, there could be an integrity test, and going against the expected code of conduct could be a major contravention of the ethical practice. Besides, by abiding by the code of conduct, she will display her honesty, and it may lead to a positive outcome in her proposed promotion.
Conclusion
This essay has applied the six steps approach in solving a dilemma in the workplace. The steps include identifying the relevant facts, ethical issues, parties involved, alternatives, consequences of alternatives, and, lastly, the appropriate action. The essay has critically examined this case in order to come up with the most appropriate action to resolve the dilemma.
Reference
Arens, A.A., Elder, R.J., & Beasley, M.S. (2013). Auditing and Assurance Services, Student Value Edition (15th ed). New York, NY: Prentice Hall.