Ethical Obligations and Decision Making in Accounting, 4/e 1
Case 2-1 A Team Player? (a GVV case)
Barbara is working on the audit of a client with a group of five other staff-level employees.
During the audit, Diane, a member of the group, points out that she identified a deficiency in the
client’s inventory system that she did not discover during the physical observation of the client’s
inventory. The deficiency was relatively minor, and perhaps that is why it was not detected at the
time. Barbara suggests to Diane that they bring the matter to Jessica, the senior in charge of the
engagement. Diane does not want to do it because she is the one who identified the deficiency
and she is the one who should have detected it at the time of the observation. Three of the other
four staff members agree with Diane. Haley is the only one, along with Barbara, who wants to
inform Jessica.
Questions
1. Discuss these issues from the perspective of Kohlberg’s model of moral
development. How does this relate to the established norms of the work group as
you see it?
Diane and the ones who did not want to take the matter to Jessica, the senior, are
reasoning at the preconventional levels of avoiding punishment and satisfying one’s own
needs. They want to avoid having more work to do or receiving a low evaluation from
missing a mistake (Diane) or going over the time budget. Barbara and Haley are
2. Assume you are in Barbara’s position. What would you do and why? Consider the
following in answering the question:
Ethical Obligations and Decision Making in Accounting, 4/e 2
• How can you best express your point of view effectively?
• What do you need to say, to whom, and in what sequence?
• What do you expect the objections or push-back will be and, then, what would you
say next?
Barbara should explain to the other team members that she feels compelled to go on and
tell Jessica. She can say that she understands their concerns and will take all the blame
for not finding the deficiency sooner. She also can state that telling Jessica will show
their integrity, due diligence, and professional objectivity by not ignoring information
that could impact the conclusion of the audit.