1. Frame the ethical issue
Should Giles and Regas have a serious relationship while working on a same case or within the same accounting firm?
2. Gather all the facts:
The couple spends personal time together during the workday
Regas is having a three hours long lunch break
Regas is being distracted from work
Team members are aware of the relationship between two
Regas and Giles have tried to be discreet about their relationship
3. Identify the Stakeholders and their obligations
Mark Sax, the controller of CAA Industries, has the right to know the hours that were billed was applied correctly and the work was done efficiently. Giles should be responsible for billing the hours and work process since he is the supervising partner on the engagement. Team members on the engagement have the right to expect the co-workers do their part of the work and have a fair treatment. Regas should consider the consequences of her actions on others. Saduga & Mihca (the firm) has the right to expect their employees to perfom their work on a professional level. The client (CAA Industries) has the right to expect the work being done correctly. Herb Morris, the managing partner of Saduga& Mihca, has a right to be told about the relationship between Giles and Regas.
4. Identify the relevant accounting ethics standards
Honesty – Fully disclosing about the relationship between the employees and hours being billed to the client. Integrity – Billing the client the correct hours and acting in accordance with principled behavior. Due care in the performance of professional responsibilities Fairness – Each team members on the engagement should be treat equally and openly.
5. Identify the operational issues
Is that an Human Resources policy existed which prohibited dating between two members of the Firm who were of different rank, and that policy appears impotent Should Giles act as the supervising partner on the engagement point
out the unprofessioness performance by Regas? Should the team members on the engagement communicate about the problems with the supervisor?
6. Identify the accounting, auditing and/or taxation issues Since the case does not deal with financial reporting per se, these issues are limited. The hours that billed to the client.
7. What are the alternatives?
Wait to see what happens and then decided what to do next
Talk to both Regas and Giles about the problems and concerns from the client.
8. Compare and weigh the alternatives
Do nothing – it is legal to do so, however it does not consistent with professional standards because there is an actual policy pointed that employees in different ranks should not be dating with each other within the firm. Wait to see what happens and then decided what to do next – Since Giles and Regas have come to an conclusion to set the personal matter aside until this particular engagement ends, it probably could wait until the project is over. However, dating is still not allowed when the employees are from different ranks. Talk to both parties – It is the company’s responsibility to ensure that the client’s work is done properly and in a timely manner. Whether or not Regas and Giles have billed extra hours to the clients because of their relationships, the company should be responsible for their employees’ behavior and let the employees aware of the policy and execute it. Also, because the fact that the team members are aware of the relationship and they deserve to be treat fairly according to the justice theory. Egoism – Defines right or acceptable behavior in terms of its consequences for the individual Utilitarianism – follow a relatively straightforward method for deciding the morally correct course of action for any particular situation. Justice Theory – respects your rights and treats you fairly and gives each person what she or he deserves. Virtue Theory – apply both to the decision maker and to the act under consideration by that party.
9. Decide on a course of action
Talk to both Regas and Giles about the problems and concerns from the client. Both of the employees should know that the company expects them to perform on a professional level during work and follow the human resources policy.
10. Reflect on your decision
Be professional and perform as a professional. Since Giles are aware that Regas is having a hard time putting herself back to work because of the relationship, they should put their personal pleasure after the work. If the relationship is getting serious, one of the parties should be resign from the firm.
1. I think both parties have the responsibility to perform the work. However, Ed Giles is the supervising partner on the engagement team, he should be more aware of being professional and perform client’s work to the standard.
2. If Giles were a person of integrity, he would tell Herb Morris he would set aside his relationship with Regas until the engagement is over. Furthermore, they should not be in a same audit team anymore since they both have personal feelings for each other. If Giles thinks that their relationship is getting serious, one of them will be resign.
3. Everyone would have one or two weak moment in a relationship. However still, a professional accountant should not bring their personal pleasure into work or even prolong the process of the client’s work. Herb Morris should still meet with Giles and talk about the client’s (CAA Industries) concerns and make it clear with the client and the relationship would not affect anything on the engagement. Since both Giles and Regas have been working on the CAA industries audit team for a while, it is not wise to replace both of them at this moment. Herb Morris, as the managing partner of the firm, has the right to inform Regas and Giles their responsibilities and expects them to perform the work within the expectation. If Regas and Giles decide to process their relationship further, then they should follow the Human Resources policy and one of them should be resign from the accounting firm in the future in order to avoid conflicts of interests.
Courtney from Study Moose
Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/3TYhaX