Staff Auditor and Student Ethical Decision Making: A Case Study

This case study analyzes ethical dilemmas faced by a staff auditor (Johnny) and a student (Mary Jo). Johnny violated professional ethics by failing to maintain proper audit documentation, while Mary Jo compromised academic integrity by accessing unauthorized test materials. The analysis identifies the stakeholders affected by these actions and explores rationalizations for their behavior. Alternative actions are recommended, emphasizing adherence to professional standards and ethical codes. The study concludes that upholding ethical principles is crucial for long-term success, and Desklib offers resources like solved assignments and past papers to help students understand these complex issues.

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Two Short Case Studies in Staff Auditor and Student Ethical Decision Making

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Introduction
The present report is developed to analyze the ethical scenarios presented in the case
study given. The scenario’s given relates to professional and personal code of ethics to be
followed for complying effective with ethical principles and procedures. The professional
scenario has presented a case where a certified public accountant has not complied with his
duties. The second scenario depicts the case of a student who has acted against the integrity code
of ethics. As such, the report presents an analysis of the ethical concerns in the given two
scenarios with the application of ethical frameworks.
1. Standards& Principles of Ethics Violated by Johnny and Marry
The professional scenario represents the situation of violation of code of ethics
established for the public accountants. Johnny, engaged in carrying out audit of ABC Company,
has not fulfilled his duties effectively as discovered by the firm manager before the inspection of
PCAOB (Public Company Accounting Oversight Board) (Public Company Accounting
Oversight Board (PCAOB), 2004). The work paper submitted by Johnny before the inspection
does not include supporting worksheet and signed engagement letter. Johnny has added an
earlier version found on his computer hard drive as supporting sheet after his manager direction
and also the engagement letter is inserted into the file later without proper explanation of its
subsequent reasons. The ethical standard violated by Johnny as per the professional code of
ethics is professional competence and care (Professional ethics, 2018). As per the ethical
standard, the professional accountants hold the responsibility of carrying out their duties as per
the legislations and should act diligently as per the ethical standards. Johnny has not
demonstrated full competency in carrying out their roles and responsibilities as he has not

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maintained proper record of worksheet and also engagement letter. Johnny can be sanctioned by
the firm or PCAOB due to negligence of his duties as per the Public Accountancy Act that ahs
provided the working standards for professional accountants (Langenderfer and Rockness, 1989).
In the second scenario of students, Mary Jo has acted against the ethics of integrity. She
has issued a certificate of being aware of integrity code of ethics but has avoided the code by
studying from the test paper that is meant only for instructor use. This is because she has violated
the code of ethics maintained by the University for the Students and therefore liable to gain
punishment from the university (Cheng and Flasher, 2016).
2. The main stakeholders in each case
Professional Scenario
On the basis of case study provided there only one other stakeholders other than the
Johnny. The stakeholder will be manager of the company he is much impacted by the decision of
the Johnny. So it vital to known here that the decision to add the working paper through applying
unfair means as audit standard requires working paper should be properly made through carrying
out proper audit process. In order to save the time and to provide the manager with the working
paper he taken from working paper from old hard drive put the tick marks without even checking
them properly. This action by Johnny will put the manager of the company in trouble as Public
Company Accounting Oversight Board (PCAOB) will question about the integrity of the
working paper that auditor has provided and also review the engagement letter. As all these
documents are not original and has no supporting evidence to prove that these documents are
made at the time of real audit process carried out by the Johnny (James, 2015).
Student Scenario

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In this scenario that main stakeholders other than the Mary Jo will be the students who
have also appeared in the test paper in which Mary Jo has appeared. It is because Mary Jo has
opted for unethical means to pass percentage in the test which is unfair on the parts of other
students (Tritschler, 2013).
3. Rationalize Behavior of Johnny and Mary Jo
Johnny in the case of professional scenario can rationalize his behavior as he does not
intend to conceal any materialistic information for his personal benefits. It is by mistake he has
failed to submit the spreadsheet and gain sign from the client. Also, Mary Jo intends to pass the
examination through studying the test paper. She has only downloaded the paper meant for
instructor use to only study and not for any other illegal activities and this rationalize her
behavior (Cheng and Flasher, 2016).
4. Alternative actions recommended for Johnny and Mary Jo
The alternative action for Johnny as per the Public Accountancy Act is to provide reliable
and fair disclosure of information to the PCAOB. However, Johnny in the case is not able to find
out the working paper for supporting the results provided in the main file. As such, he should do
the calculations gain for providing a fair record of information for supporting the information
disclosed to the auditing board (Public Company Accounting Oversight Board (PCAOB), 2012).
The alternative course of action for Mary Jo in the student scenario as per the student
code of ethics is to gain permission from instructor regarding the use of study kit for achieving
success in the examination. This would enable her to gain support of the instructor for studying
and also complying with the ethical rules and regulations of the university effectively (Keenan,
2015).

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5. Ethical Dilemmas of Johnny and Mary Jo
Johnny on confronting with his ethical dilemma in the professional case scenario failed to
speak up due to negligence on his part to maintain the proper record of spreadsheet and signature
of client. He has acted against the code of ethics established for professional accountants and
therefore was not able to rationalize his behavior on being confronted. However, he can voice
over his concerns as the firm ABC may be has not directed the accounts to maintain a record of
spreadsheet that may be the cause for Johnny to being reluctant in maintaining an appropriate
record of spreadsheet (Cheng and Flasher, 2016).
On the other hand, in the case of student scenario, Mary Jo may have failed to speak up
on being confronted as she violated the integrity code of university by non-complying with the
copyright act. However, she can voice her concern by proving that the study material download
by her protected by the copyright act was only for studying purpose and is also used by other
students (Cheng and Flasher, 2016).
Conclusion
It can be stated from the overall discussion held in the report that compliance with
professional and personal code of ethics is very essential for an individual to achieve long-term
growth. Violation of the code of ethics can only provide short term success to an individual but
complying with ethical standard is essential to promote one’s long-term success.

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References
Cheng, C. and Flasher, R. 2016. Two Short Case Studies in Staff Auditor and Student Ethical
Decision Making. Issues in Accounting Education 33(1), pp. 45-47.
James, H.C. 2015. Modern Auditing & Assurance Services. Wiley.
Keenan, J. 2015. University Ethics: How Colleges Can Build and Benefit from a Culture of
Ethics. Rowman & Littlefield.
Langenderfer, H. Q., and J. W. Rockness. 1989. Integrating ethics into the accounting
curriculum: Issues, problems, and solutions. Issues in Accounting Education 4 (1), pp. 58–69.
Professional ethics. 2018. Retrieved 28 April, 2018, from
https://www.aat.org.uk/about-aat/professional-ethics
Public Company Accounting Oversight Board (PCAOB). 2004. Audit Documentation. Auditing
Standard (AS) No. 1215. Release No.2004-006. Washington, DC: PCAOB.
Public Company Accounting Oversight Board (PCAOB). 2012. Order Instituting Disciplinary
Proceedings, Making Findings, and Imposing Sanctions. Release No. 105-2012-008.
Washington, DC: PCAOB.
Tritschler, J. 2013. Audit Quality: Association between published reporting errors and audit firm
characteristics. Springer Science & Business Media.