Question

Jeremy Roberts had great expectations about his future as he sat in his graduation ceremony in May 2015. He was about to receive his Master of Accounting degree, and next week he would begin his career on the audit staff of Mayberry, Taylor, Jones & Co., CPAs. Things looked a little different to Jeremy in February 2016. He was working on the audit of Johnson Manufacturing, an electronics manufacturer with a calendar year-end. The pressure was enormous. Everyone on the audit team was putting in 70-hour weeks, and it still looked as if the audit wouldn’t be done on time. Jeremy was doing work in the fixed asset area, vouching additions for the year. The audit program indicated that a sample of all items over $20,000 should be selected, plus a judgmental sample of smaller items. When Jeremy went to take the sample, John Wren, the senior, had left the client’s office and couldn’t answer his questions about the appropriate size of the judgmental sample. Jeremy forged ahead with his own judgment and selected 50 smaller items. His basis for doing this was that there were about 250 such items, so 50 was a reasonably good proportion of such additions. Jeremy audited the additions with the following results: The items over $20,000 contained no misstatements; however, the 50 small items contained a larger number of misstatements. In fact, when Jeremy projected them to all such additions, the amount seemed quite significant. A couple of days later, John Wren returned to the client’s office. Jeremy brought his work to John in order to apprise him of the problems he found and got the following response: “Gosh, Jeremy, why did you do this? You were only supposed to look at the items over $20,000 plus 5 or 10 little ones. You’ve wasted a whole day on that work, and we can’t afford to spend any more time on it. I want you to throw away the schedules where you test the last 40 small items and forget you ever did them.” When Jeremy asked about the possible audit adjustment regarding the small items, none of which arose from the first 10 items, John responded, “Don’t worry, it’s not material anyway. You just forget it; it’s my concern, not yours.” Required: In a 3 to 4 page paper, answer the following questions regarding the case: 1. Describe the ethical dilemma in detail, using pertinent facts to support your answer. 2. Identify each of the stakeholders and fully explain how each person/groups is a stakeholder. 3. List, in detail, several alternative responses that can be selected regarding the dilemma and explain the effect that selecting each of the alternative responses would have on the stakeholders. 4. Fully explain the action and implementation plan you would take regarding the response you would select.

Answer 1

answer:

the requireds,

1.

• The predicament was that Jeremy didn't discover any error in things more than 20000$ anyway he found considerable misquote in littler things which ought to be accounted for in the review report .
• while according to the senior John Wren Jeremy shouldn't have inspected the littler things with sharp appointment he ought to have evaluated the things more than 20000$ distinctly with allotment .
• Anyway according to Jeremy those things ought to be recorded if since those littler things were demonstrating an extensive sum indicated be recorded in the review report or else the applicant ought to be educated about the results of misfortunes to be looked by the competitor .

2.

• The partners for this situation are the Johnson fabricating as it will bear impressive misfortune if the littler things exhibit a lot of misquote.
• The other partner will be Mayberry, Taylor, Jones and Co.

3.

• The elective reactions is that if the littler things donot imitate a lot of misquote then the authorities of Johnson Manufacturing ought to be educated of the mix-up and the methods for amending the oversights to keep any further misfortune .
• Also if the littler things portray a lot of error then they ought to be accounted for in the review report.

4.

• As a senior faculty I would educate the organization incharges and additionally demonstrate the sum in the review answer to anchor the stake of review firm and with the end goal to keep the stake of the organization I will illuminate the organizations disadvantage and the approaches to enhance n work upon its downsides.