Betty Crawford is a staff accountant for a local CPA firm. For the past 15 years,...

Betty Crawford is a staff accountant for a local CPA firm. For the past 15 years, the CPA firm has given employees a year-end bonus equal to two weeks’ salary. On November 30, the firm’s management team announced that there would be no annual bonus this year. Because of the firm’s long history of giving a year-end bonus, Betty and her co-workers had come to expect the bonus and felt that the firm had breached an implicit agreement by discontinuing the bonus. As a result, Betty decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. The firm's policy is to pay overtime at 150% of straight time. Betty’s supervisor was surprised to see overtime being reported, because there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the “honor system” in reporting their work hours.

Instructions:

Answer each question below in a way where you use at least 200 words to answer both questions ( NOT 200 words per question). After doing this, please respond to one of your peer's responses by using at least 100 words in your response.

1. Is the firm acting in an ethical manner by eliminating the bonus? Explain your answer.

2. Is Betty behaving ethically by making up the bonus with unnecessary overtime? Why?

Expert Solution

1. The firm is not acting ethically by removing bonus without informing the employees since the company has the practice to pay bonus every year so employee may create some obligation because they think they will pay from bonus but if employer suddendly cancel the bonus employees will not be able to settle their obligation. Considering legal point of view employers are not liable to bonus if theydont have profit or they have some other plans but in that case employer need to inform the employees in advance that they will not pay so the employees can make proeper arrangements . However not paying bonus should not become practice employer need to take care of their employees as well

2. Betty not acting ethically by working unneccessarily without any reason she is trying to manupulate the laws of company it is fact that the company has not paid the bonus but working late is not the correct solution as the company can take serious action against her and she might loose her job, instead she should communicate her problem to the management and request them to reconsider their decision as the final decision lies with management to pay bonus or not.

One of my peer feel same what i have mentioned he feels paying bonus is solely discretionof management no one can force them to pay only you can request them on the other hand management can't cancel the bonus without informing the staff in advance

ekkarill92 answered 1 year ago

Tonya Latino is a staff accountant for Cannally and Kennedy, local CPA firm. For the past...

Tonya Latino is a staff accountant for Cannally and Kennedy, local CPA firm. For the past 10 years, the firm has given employees a year – and bone is equal to two weeks salary. 15, the firms management team and there was that there would be no angel bonus this year. Because of the firm’s long history of giving a year-end bonus, Tonya and her coworker had come to expect the bonus and believe that Cannally and Kennedy had implicit...

You are a new tax staff accountant at a local CPA firm. During your first week...

You are a new tax staff accountant at a local CPA firm. During your first week on the job a client, Ms. Macchiato, came into the firm seeking tax advice. In particular, Ms. Macchiato owns a small coffee shop, called the No Doze Café. Ms. Macchiato currently operates the No Doze Café as a sole proprietorship but is considering incorporating the business as an S corporation. Ms. Macchiato works full-time in the business; if she converts the business to an...

Lisa Deuel is a certified public accountant (CPA) and staff accountant for Bratz and Bratz, a...

Lisa Deuel is a certified public accountant (CPA) and staff accountant for Bratz and Bratz, a local CPA firm. It had been the policy of the firm to provide a holiday bonus equal to two weeks' salary to all employees. The firm's new management team announced on November 15 that a bonus equal to only one week's salary would be made available to employees this year. Lisa thought that this policy was unfair because she and her coworkers planned on...

You have been working at a local CPA firm for the last 2 years. At the...

You have been working at a local CPA firm for the last 2 years. At the beginning of the year, you passed the last section of the CPA Exam. Last week, your CPA License came in the mail. Consequently, you have now decided to go into business for yourself. You have some savings and have a line on a bank loan for start-up costs. Additionally, you do not have a noncompete clause in your employment agreement with your current CPA...

You are a member of the auditing staff of a medium-size CPA firm, Reid, Daniels, &...

You are a member of the auditing staff of a medium-size CPA firm, Reid, Daniels, & Luke. One of the audit partners, Alan Daniels, has asked you to prepare a report addressing the topic of the use of data analytics technology both in external financial statement auditing and in internal auditing. He has heard that the use of such technology is revolutionizing how larger CPA firms conduct audits and does not want RD&L to fall behind. He is particularly interested...

You are working as an accountant at a mid-size CPA firm. One of your clients is...

You are working as an accountant at a mid-size CPA firm. One of your clients is Bob Jones. Bob’s personal information is as follows: DOB: October 10, 1952 SSN: 444-00-4444 Marital Status: Single Home Address: 5100 Lakeshore Drive, Pensacola, FL 32502 Bob has a very successful used car business located at 210 Ocean View Drive in Pensacola, Florida. Last year, you filed a Schedule C for Bob that had $1,200,000 in taxable income. The business will have an income growth...

You are a staff accountant at Reimer & Company, a small public accounting firm. One of...

You are a staff accountant at Reimer & Company, a small public accounting firm. One of the firm's partners, Leona Reimer, has asked you to deal with a disgruntled client, Mr. Robert Ramsey, owner of the city's largest clothing store. Mr. Ramsey is applying to a local bank for a substantial loan to remodel his store. The bank requires accrual based financial statements, but Mr. Ramsey has always kept the company's records on a cash basis. He does not see...

You are a new staff accountant at Worldwide Consulting, a global accounting firm that specializes in...

You are a new staff accountant at Worldwide Consulting, a global accounting firm that specializes in providing consulting services to companies both domestic and global. As part of your new responsibilities, you have been instructed to review SEC proposed rules to determine whether they should be commented on. Visit the Securities and Exchange Commission (SEC) website at www.sec.gov (Links to an external site.). Go to the Regulation menu, and the Proposed Rules sub menu. Review and identify a recent proposed...

You work as an accountant for regional CPA firm of Cash and Green. Your supervisor asked...

You work as an accountant for regional CPA firm of Cash and Green. Your supervisor asked you to conduct research for three unrelated clients. 1.Hester Company is planning this year to present comparative income statements but only the current year’s balance sheet. Devin, president of Hester Company requests your advice as to whether comparative cash flow statements for both the current and prior periods are necessary considering only the current year’s balance sheet is presented. Are there any authoritative pronouncements...

You are a new tax staff at H CPA Firm. You have been asked to draft...

You are a new tax staff at H CPA Firm. You have been asked to draft a tax memorandum for one of the firm’s new clients, Ms. Rachel Ross. Ms. Ross has a number of unique tax issues this year. The partner at H CPA, your boss, has requested a detailed memorandum outlining the relevant facts, proper tax treatment and applicable tax law. Ms. Ross is unavailable to answer any clarifying questions regarding the facts described below. If assumptions are...

Question