The Audit

Essay by PaperNerd ContributorUniversity, Master's February 2002

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I-CURRENT SITUATION Mission Provide auditing services nationally Policies Code of ethics : provide auditing services in adherence to high ethical standards II-EXTERNAL ENVIRONMENT TASK ENVIRONMENT · Industry-specific common illegal practices : to report employee payments as individual contractor payments to escape from payroll taxes.

· CompanyÕs in this industry sets pressure on CPA firms to ignore such practices in exchange of customer loyalty.

III-INTERNAL ENVIRONMENT CORPORATE CULTURE The CPA firm has a well-defined and clearly stated culture. But the company obviously displays a lack of conformisation among its staff. Management applies contradictory policies inside departments. This statement is first explicited by the managerÕs inability to give Sue a clear answer to her problem that directly relates to the companyÕs code of ethics.

IV-ANALYSIS OF STRATEGIC FACTORS (SWOT) A-SITUATION ANALYSIS Strengths & Weaknesses · Comply with managerÕs recommendations (S) · Comply with the departmentÕs common procedures (S) · maintain coworking relationship perenity (S) · preserve manager and coworkers against problems (S) · Sue keeps the account (S) · Contradict with her individual CPA responsibilities (W) · Act in contradiction to the the companyÕs code of ethics (W) · Act in contradiction with the principles of Ç distributive justice È (W) Opportunities & Threats · Compliance with the industry common procedures (O) · No fear of losing a customer (O) · Keep customer satisfaction (O) · Set CPA firm in a position of cautioning customer illegal practices (T) · Exposes the customer to legal problems (T) · Threatens the interests of the customer firmÕs stockholders or owners (T) · Can potentially set the company as the party of the customerÕs practices (T) B-REVIEW OF MISSION & OBJECTIVES Control and reinforce adherence to code of ethics at management and team levels.

V-RECOMMENDED STRATEGY Sue should first report this practice in her audit and...