Case 1-7 Eating Time
This case is treated as GVV in the Test Bank IM in Chapter
2. Faculty can assign the case in Chapter 1 or delay it until
Chapter 2, if they plan to use it for GVV testing purposes in
Chapter 2.
Kevin Lowe is depressed. He has been with the CPA firm Stooges LLP for only three months.
Yet the partners in charge of the firm—Bo Chambers and his brother, Moe—have asked for a
“sit–down.” Here’s how it goes:
“Kevin, we asked to see you because your time reports indicate that it takes you 50 percent
longer to complete audit work than your predecessor,” Moe said.
“Well, I am new and still learning on the job,” replied Lowe.
“That’s true,” Bo responded, “but you have to appreciate that we have fixed budgets for these
audits. Every hour over the budgeted time costs us money. While we can handle it in the short
run, we will have to bill the clients whose audit you work on a larger fee in the future. We don’t
want to lose clients as a result.”
“Are you asking me to cut down on the work I do?” Lowe asked.
