Ethical Dilemmas in Auditing: A Case Study of Financial Irregularities

This case study examines ethical issues within an auditing context, focusing on irregularities noticed by Janice Roberts regarding cheque requisitioning. The stakeholders include Janice Roberts, Brett Andrews (CFO), Audrey Miller (Assistant Accountant), and the General Manager. The core ethical issues revolve around irregularities in cheque requisitioning, potential theft by the GM and CFO, and breaches of APES 110 principles such as integrity, objectivity, and professional behavior. The analysis considers alternative actions Janice could take, including ignoring the issues, reporting to a higher authority, confronting the individuals involved, or leaving the job. The recommended action is to report the issues to a higher authority to ensure appropriate measures are taken to address the unethical conduct, prevent long-term damage to the business, and uphold ethical standards. Desklib provides a platform for students to access similar case studies and solved assignments.

Running head: AUDITING
Auditing
Name of the Student
Name of the University
Author’s Note

1AUDITING
American Accounting Association (AAA)
Application Description
1. Determination of the
facts
As per the given situation it needs to be seen that Janice Roberts notices
certain irregularities with the requisitioning of the cheques in which the
sequence of the payee is an unknown entity. Despite of this, the various
types of the supporting documentations are seen to be in favor of the
requisitions made for the cheques (George, Jones & Harvey, 2014).
2. Identification of the
stakeholders
The main stakeholders of the model are further listed as followed:
 Accountant for the large company- Janice Roberts
 The chief financial officer for the large company- Brett
Andrews
 Assistant of Accountant for the large company- Audrey
Miller
 General manager of the large company (Trung, 2015)
3. Defining the ethical
issues
The main ethical issues with the company needs to be determined as per
irregularities with the requisitioning of the cheque and cases where the
numbers are of the sequence and entity of the payee is unknown. Despite
of this, various types of supporting documentation of the requisitioning
were attached. It needs to be further inferred that other concerns with the
auditing are seen to be based on the number of other issues pertaining to
the concerns associated to GM and CFO stealing of large sums of money
from Pet Plus Limited for their personal use (Kothari, Mizik &
Roychowdhury, 2015).
4. Identification of the
major principles, rules and
values applicable with the
The identification of the major principles related to the given case as per
APES 110 are measured as per the factors such as Integrity, objectivity,
professional competence, confidentiality and professional behavior. In

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case the given case, irregularities with the requisitioning of the cheques needs
to be considered as breach of integrity. This is seen to be lacking with the
straightforwardness and honesty among the business relationships. The
breach of objectivity factor needs to be defined as per the various types of
the other considerations which are seen to be based on the overriding
professional behavior as per the assurance of not to worry about cheque
requisition by Janice but not complying to her statement. The breach of
some of the other values pertaining to the given case needs to be also
considered relevant with General Manager and CFO stealing of money
from Pet Plus. This is directly relevant to the breach of Professional
behavior. This relates to the relevant laws and regulations of avoiding any
conduct that discreet the profession. This is also seen to be breach of
integrity factor which will create long-term negative impact on the
business (Magee & Zeff, 2016).
5. Specification and
comparison of the
alternatives
The various types of the specification of the alternatives to the given case
are listed as follows:
1. The first alternative is that Janice may decide to stay in the
organization but not react to such ethical issues
2. The second alternative related to this case needs to be identified with
Janice deciding to reporting the issues with higher authority. This will
lead to reporting of the ethical breached to her immediate supervisor.
However, this should not include chief financial officer Brett Andrews
and general manager.
3. The various alternative for Janice needs to be seen with directly
confronting to the Brett Andrews and general manager and letting them
know about the breach of the ethical issues
4. The last alternative is depicted with Janice deciding to leave the job

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(Kano et al., 2017).
6. Assessment of the
consequences for each
alternative decision option
1. The first alternative is considered as the worst decision as the
unscrupulous activities in the business will continue and adversely affect
the business in the long run.
2. In the second alternative there is a high possibility of higher authority
taking the appropriate measures to curb such issues in the organization.
This decision making will be highly conducive in terms of taking
appropriate step to deal with the ethical decision making.
3. The consequence of the third alternative may lead to even graver
consequence for both the organization and Janice herself. The CFO and
GM may take use of their high position and terminate Janice due to some
false allegations.
4. In case Janice decides to leave her job then also it will serve no good to
the company in the long run. As the unethical activities will go untraced
and such activities will continue to take place in the organization.
7. Rational for ethical
decision making
The rationale for going forward with the second measure is due to the fact
that alternative there is a high possibility of higher authority taking the
appropriate measures to prevent such unethical issues in the organization.
This decision making will be highly conducive in terms of taking
appropriate step to deal with such problems in the long-run (Carey,
Monroe & Shailer, 2014).

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Reference
Carey, P. J., Monroe, G. S., & Shailer, G. (2014). Review of Post‐CLERP 9 Australian Auditor
Independence Research. Australian Accounting Review, 24(4), 370-380.
George, G., Jones, A., & Harvey, J. (2014). Analysis of the language used within codes of ethical
conduct. Journal of Academic and Business Ethics, 8, 1.
Kano, F., Krupenye, C., Hirata, S., Call, J., & Tomasello, M. (2017). Submentalizing cannot
explain belief-based action anticipation in apes. Trends in cognitive sciences, 21(9), 633-
634.
Kothari, S. P., Mizik, N., & Roychowdhury, S. (2015). Managing for the moment: The role of
earnings management via real activities versus accruals in SEO valuation. The
Accounting Review, 91(2), 559-586.
Magee, R. P., & Zeff, S. A. (2016). Lawrence Revsine: Influential Teacher and
Author. Accounting Horizons, 30(4), 517-524.
Trung, N. K. (2015). Ethics Education In The University. International Journal of Scientific &
Technology Research, 4(8), 5-10.