Chapter 6 Apparently The Other Audit Partners Sided With

CASE 6.1

LEIGH ANN WALKER,

STAFF ACCOUNTANT

Synopsis

In this case, a staff accountant of a large, international accounting firm is dismissed by her

employer when her integrity is questioned by a senior auditor. The staff accountant had told the

senior auditor, who at the time was her immediate supervisor on an audit engagement, that she had

not taken the CPA exam the month prior to joining the firm. In fact, the staff accountant had taken

242

Leigh Ann Walker, Staff Accountant—Key Facts

Case 6.1 Leigh Ann Walker, Staff Accountant

243

1. Leigh Ann was well qualified for an entry-level position in public accounting given her college

credentials.

2. According to Leigh Ann’s college friends, she was sometimes too “intense.”

5. Leigh Ann was dishonest with Jackie because she was afraid that she had not done well on the

CPA exam and wanted to avoid the embarrassment of admitting that fact when she received her

grades on the exam.

Instructional Objectives

1. To illustrate the critical importance of independent auditors possessing personal integrity.

Case 6.1 Leigh Ann Walker, Staff Accountant

244

Suggestions for Use

I typically assign this case early in the semester to give students insight into the staff

accountant’s work role and work environment. Given the ethical issues raised in this case, it could

be assigned as well during discussion of the AICPA Code of Professional Conduct. The key point

that I believe should be stressed in this case is the critical need for auditors to be able to trust their

colleagues. This is particularly important for auditors in supervisory positions who have to “sign

off” on the work of their subordinates. A common reaction to this case by students is that Jackie

Suggested Solutions to Case Questions

1. Students tend to react quite differently to this series of questions. Following are summaries of

some of my former students’ responses to these questions.

a. Jackie should have given Leigh Ann a chance to prove that she could be trusted. If I had

been Jackie, I would have watched her very closely on her next few assignments. If I saw

b. I believe that Jackie treated Leigh Ann unfairly since she did not even discuss the matter

with her. Jackie should have taken into consideration the fact that Leigh Ann was a newly-

hired employee who simply wanted to make a good first impression. At the very least,

Case 6.1 Leigh Ann Walker, Staff Accountant

245

Jackie should have sat down with Leigh Ann and explained her view of the matter and then

given Leigh Ann an opportunity to defend herself. Rather than immediately taking the

c. I believe that Jackie was justified in insisting that Leigh Ann be fired. Leigh Ann’s ability

to “lie on the spot” about a fairly trivial matter indicated that she could not be trusted

Note: This case has easily been among the most popular cases in the earlier editions of this

textbook. Several adopters have sent me comments regarding this case. I appreciate all such

feedback. Bob Eskew, Purdue University, sent me a note reporting that his students were much

2. Again, this is a very subjective question that evokes quite different responses from students.

Following are summaries of some of the general points made by former students of mine in response

to this question.

a. Independence and integrity are the two key traits that auditors should possess. If an auditor

lacks either one of these traits, his or her work cannot be trusted. Granted, an individual

Case 6.1 Leigh Ann Walker, Staff Accountant

246

Note: It is quite interesting that most students express the view that Jackie Vaughn and Don Roberts

overreacted to the dishonest statement made by Leigh Ann. However, in response to the second

question, the majority of students tend to imply that an individual such as Leigh Ann is unsuited for

the auditor’s professional role.