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EarthWear Hands-on Mini-case

Chapter 19 - Ethics
The McGraw-Hill Companies, Inc., 2014

In this mini-case you will read about a Willis and Adams staff auditor who is confronted with an ethical
challenge. You will then evaluate what he should do, and what you would do in a similar situation.
Read the background information about Mike Stephan, a first-year Willis and Adams staff auditor who
is confronted with an ethical challenge. To open the background document please double-click on the
following icon (a document will open in Microsoft Word).


Complete the questions on the WORKSHEET using the background information provided in the
document above.
Fields you are to complete on the WORKSHEET are colored yellow. The color will disappear as the field is completed.

Print a copy of the WORKSHEET to submit in class unless otherwise indicated by your instructor. The
WORKSHEET is formatted to print on a single sheet of paper.


Chapter 19: Ethics Evaluation

List at least three alternatives available to Mike?

1. Mike could mark down the actual time he spent on the audit,
2. Mike could forge the amount of time spent on the audit within the budgeted amount,
3. or Mike could mark down 8 hours as was done in the past year's audit
What are the pros or potential upside of each alternative you listed above?
1. He would not feel as though he acted unethically
2. He would not receive a bad performance evaluation
3. He would be able to attribute the excess of hours to it being the same as last year's
What are the cons or potential downside of each alternative?
1. He would receive a bad performance evaluation
2. He would feel as though he acted unethically
3. He might still receive negative consequences because he did not do the audit in 6 hours
What are the implications of "eating time" for Mike, the firm, and others involved?
For Mike, eating time means that he would spend more time on an audit than he will get paid for.
For the firm, eating time means they will be within their budgeted hours. For everyone else, they
will receive good performance evaluations.
Alternatively, what are the implications if Mike decides not to follow Alex's advice and
record the accurate time spent on the cash audit?
Mike, Alex, and Dianne will all receive bad performance evaluations. Dianne will be particularly
upset if she ends up losing the promotion and potentially will take it out on Mike.
In your opinion, which of Mike's alternative courses of action would provide the best
outcome and why?
I believe if Mike records that it only took 8 hours then it would provide the best outcome. 8 hours is
a good middle ground between 6 and 10 and it was the amount of hours that was recorded the
previous year. I don't think Mike or his superiors will receive as bad evaluations if he records the
same number as last year.
How would you handle the ethical issues involved in this situation?
I would probably break the numbers in half and record 8 hours because it won't effect the
performance evaluation as much as recording 10 hours and it will be uniform with last year's

Class or

Melissa Weiss