Ethics has become a vital issue in accounting firms today to ensure the accuracy of the work done and also to any form of conflict of interest. Companies understand the importance of maintaining ethics to the extent that they aim at coming up with policies that aim at dealing with ethical issues. However, organizations still find themselves in ethical dilemmas such as in the case of Barbra.
Analysis of Working for Hours without Charging Clients
From the information given in the case study, it is not ethical for Barbra to work for hours without charging the client (Kieso, 2010). If she works for the extra hours then she is also violating the employment policy that is provided by the employer who needs payment for work done. In addition, there is the risk that she might start a habit that would be expected from her. Robert, the audit supervisor is also wrong for asking Barbara to work without any pay because it not only violates the employment policy, but also the legal regulations and laws that are in place for auditors. The action also denies the client the right to pay for the services that are being provided. It can also harm the company in terms of reduced revenues, harm the employees who do not want to follow the practice and can encourage other clients to expect the same treatment from the firm.
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Resolving the Ethical Dilemma
Resolving such ethical dilemmas is vital in ensuring the success of companies. It can be resolved using the six-step approach that includes the first step where the relevant facts need to be obtained. It is vital considering the fact that Lakes Brother’s has in the past been troublesome to audit previously.
The second step is identifying the ethical issues from the fact. In this case, the issue involved working for hours without charging the client. It is an ethical issue because it deprives the firm its revenues and can encourage other customers to expect the same treatment from the firm.
The third step is identifying those who are affected by the dilemma and how they affected. In this case, those who are affected include the audit firm because it will lose revenues from the provision of free services. Barbara is also affected because she risks losing her job for going against the policies of the company. She may also start a bad habit that will be expected from her. Other employees will also be affected by being expected to work for free even if they do not want to.
The next step is identifying the alternatives that are available to the individual who needs to resolve the dilemma. In this case, Barbra has the option of refusing to work without any pay as expected by Robert (Schroeder, 2013). She can report the issue to the manager, or resign from her position. However, there are consequences for each action.
The fifth step is identifying the consequences for each action. For example, disobeying Robert can result in a bad evaluation from him. Reporting Robert to the management can negatively affect the relationship between Barbra and Robert who might soon be the manager. Finally, resigning can result in unemployment.
The last step is identifying the best action which is discussing the issue with Robert because he is the immediate supervisor.
Conclusion
Ethical issues affect most companies in their operation and it is best to find a course of action that will best fit the situation. In this case, the ethical issue is working for hours without charging the client. The best action is discussing the issue with Robert because he is the immediate supervisor.
References
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2010). Intermediate Accounting : IFRS approach . Hoboken, N.J: Wiley.
Schroeder, R. G., Clark, M., & Cathey, J. M. (2013). Financial accounting theory and analysis: Text and cases .
