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Question (Case):Jimmy Ford is an audit manager for Fitzgerald & Milhouse Chartered Accountants (F&M). Jimmy has been informed that the firm has plans to promote him to partner so long as he continues his good work.
Jimmy has an array of talents that the firm admire. Jimmy has bought a new house, is a member of various clubs and generally confident about the future.
Jimmy is assigned to the audit of Engines International Ltd (EI), one of F&Ms biggest clients. EI use a questionable method of recognizing revenues which has been investigated by ASIC. Jimmy concludes the method is not appropriate for EI.
Jimmy discusses the matter with the senior audit partner. The senior audit partner tells Jimmy that the method has been used for 10 years and is appropriate. The partner is also of the view that F&M will lose EI as a client if they are challenged about the use of this method.
Jimmy argues that while the method was okay in the past, the ASIC investigation has changed matters. Jimmy then tells the partner he accepts her decision but plans to include a dissenting statement in the audit working papers. The partner tells Jimmy she is not willing to permit such a statement, but that she is willing to write a letter to Jimmy acknowledging full responsibility for the audit.
The audit partner concludes by informing Jimmy that she is not comfortable with making him an audit partner and that he has grown up to do.
What should Jimmy do? Use the Code of Ethics for Professional Accountants and the American Accounting Association (AAA) Model to help consider your response to this question.
Answer: Our experts were able to achieve the following points in the assignment:
American Accounting Association
A model Decision-making process
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