Question

From the following scenario:

You are a new staff accountant in your first year of training within a small practice. An in charge accountant with 2 1/2 years of experience has been ill and been home on sick leave. You are due to go on a short leave to study for the CPA exam. You have been told by your manager that, before you go on leave, you must complete some complicated reconciliation work, begun by the in charge accountant. The deadline suggested appears unrealistic, given the complexity of the work. You feel that you are not sufficiently experienced to complete the work on your own. You would need additional supervision to complete the work to the required standard, and your manager appears unable or unwilling to offer the necessary support. If you try to complete the work within the proposed timeframe but fail to meet the expected quality, you could face repercussions on your performance evaluations. You feel slightly intimidated by your manager, and also feel pressure to do what you can for the practice in what are challenging times.

Requirements:

1. Identify the issue(s) you are facing as a new staff member.

2. Identify the alternatives available in the given situation.

3. Choose the alternative from the identified choices that best meets the AICPA Code of Conduct standards of due care and scope and nature of services. Explain your choice.

4. What issues in this situation, if any, make you uncomfortable due to your knowledge of the AICPA Code of Conduct, particularly the sections regarding due care and scope and nature of services?

5. What are the acceptable alternatives in this situation under the AICPA Code of Conduct?

6. What will you do? Why?

Answer 1

Since, there are multiple sub-parts to the question, I have answered the first four parts (Part 1 to Part 4).

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Part 1)

This is a situation of Ethical Dilemma or Ethical Conflict, whereby the accountant is not able to take a conclusive decision with respect to the work assigned to him. Going against the manager may cost the accountant his job. Therefore, the accountant needs to take a decision as to whether he should act in his own interests and save his job (even when he doesn't have the necessary skills/competence to complete the assignment) or should comply with the code of conduct established by AICPA which requires the accountant to act with integrity and professionally in the execution of his responsibilities.

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Part 2)

The following alternatives are available in the given case:

1) Accept the work and comply with the instructions of the manager.

2) Refuse to accept the assignment and abide by the code of conduct as established by AICPA.

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Part 3)

Refusing to accept the assignment would be the best alternative as it meets the AICPA Code of Conduct standards of due care and scope and nature of services. AICPA scope and nature of services requires an accountant to act ethically, with integrity and not focus on his personal interests. Besides, the accountant should accept the assignment only if is he is confident that he has the necessary skills and competence to perform the work to the satisfaction of the client and other relevant parties. As the accountant's manager has refused to provide with him any help/support, he should not accept the project as he knows in advance that the work is complex and he doesn't have the adequate competence to handle the assignment. This would help the accountant to comply with the principle of due care and diligence.

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Part 4)

The following issues would make the accountant uncomfortable:

1) Overriding of the principle of due care and diligence if the assignment is accepted.

2) Overriding of the principle of integrity as acceptance of assignment is done solely for the fear of losing the job.

3) Overriding of the public interest aspect of certified public accountants’ services which requires the accountant to accept assignments or provide services which are in line with the acceptable professional behavior.