Mike Stephan is a first-year staff auditor at Willis and Adams. Mike recently graduated with his undergraduate degree in accounting and was excited about his new job at Willis and Adams. Mike came from a smaller school that typically does not get a lot of attention from campus recruiters. Mike was pleased to get an interview and then an offer from Willis and Adams. From the beginning, Mike was impressed with the firm’s culture and he felt that it would be a great fit for him professionally. Throughout his junior year, he worked hard to reach out to the firm’s recruiters to demonstrate a sincere interest in the firm. In the end, Mike was one of only two students that Willis and Adams hired ...view middle of the document...
Mike was embarrassed that he had not looked more carefully at the dates. It seemed like it took forever for Roxanne’s staff to track down the correct deposit slips so that Mike could proceed with the planned audit procedures. In total, Mike estimated that he had “wasted” over two hours. Mike was worried that he would not be able to complete the cash audit area in the eight hours budgeted. As Mike began working on the reconciliation again, Alex Ashwal, Mike’s senior on the audit, stopped by his desk and said:
“We are really under the gun with the budget on this audit. I know there were originally eight hours allotted to the cash audit, but I think six hours should be enough. Make sure to be efficient. Let me know if you have any questions so you don’t spin your wheels and end up going over budget.”
Mike was too embarrassed to tell Alex about what had happened with the deposit slips. As Mike was talking about reducing the budgeted hours, Mike remembered that when he looked at last year’s working papers the procedures were the same as for the current year and the budgeted hours for cash last year was eight. He had also noticed that the staff person had gone over budget last year. Now Alex wanted Mike to do it in six hours and he had already “spun his wheels” for two hours.
Alex’s words were echoing in Mike’s mind as he worked hard to complete the cash area. As it came time to go home, it became more and more clear that Mike was not going to be able to complete the cash procedures within six hours. After contemplating his situation for a couple minutes he decided that he’d better call Alex and tell him what had happened with the mixed up bank deposit slips. After Mike explained the situation, Alex was silent for a long time and then finally said:
“Look, we are just going to have to eat that lost time. I just got done speaking with Dianne and she is adamant about finishing this audit under budget. Dianne is up for promotion to senior manager and I’m sure she doesn’t want an over-budget audit right before the partners meet to decide her promotion. Don’t worry about it, Mike. Stuff happens and it was partly the client’s fault anyway. Just take as long as you need to finish the planned procedures and then put down six hours on the work schedule.”
From what Alex said,...