Auditing Robert's Dilemma Essay Example

Introduction

Robert`s dilemma can be very disconcerting. It is the kind of predicament that makes most auditors cringe in fear of losing their jobs. He is faced with a situation where choosing either decision is tantamount to causing certain problems. Robert has to decide whether to distance himself from the inconsistencies he discovered regarding Oliver Bigelow`s dealership or choose to "blow the whistle" and expose Bigelow; in which case he will end up losing his job. Based on the situation that Robert finds himself in, it would be advisable for him to do the right thing which is standing by his ethics through the certification of the lack of financial soundness in the business between Bigelow`s dealership and the bank.

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Action

The best action for Robert to take is to blow the whistle. This is likely to deter corrupt practices and promote transparency within the organization. It is, however, advisable for him to take up the matter with a lawyer first in a bid to understand how the situation is likely to turn out and also all his available options. Besides, this will ensure the development of a water-tight case against the offender. Also, based on the job security threat, he has to follow the correct procedures for launching grievances (Ferramosca, D'Onza & Allegrini, 2017). It is also possible that Jerry may initiate delay tactics to keep him away and in such a case, Robert has to be well prepared in light of such an occurrence.

If Robert fails to report the matter to local bank, he is likely to become subject to ethical misconduct, and the hiring entity may seek to take up legal action against him in the event that the cover-up is discovered. There are a number of sanctions that are likely to be imposed on him in this kind of scenario if he chooses to conceal information as demanded by his boss. According to Sweeny and Roberts (1997), the bank can decide to take up legal action against him. Also, disciplinary action which has been established within the profession is likely to be taken up by the relevant authorities. Further still, owing to the violation of security laws, harsh penalties are likely to be imposed on Charles Caldwell and Company, the organization that he works for.

Who the Information should be disclosed to

In this case, it is apparent that the Jerry Braggs one of the owners of the Company is adamant on taking over the auditing of the dealership since he is afraid that an exposure is likely to put the organization out of business. Robert should, therefore, decide to report the matter to the Securities and Exchange Commission (SEC). By sounding the alarm, Robert will have managed to ensure that the problem is identified early enough and the appropriate measures taken before the matter blows out of proportion. If he was to choose to keep the matter to himself, the organization`s reputation would be tarnished, and the Company could face an even worse situation than the one Jerry has envisioned.

The SEC has some predetermined protection clauses for whistle-blowers which have been initiated owing to the imminent threat that they face from their superiors upon disclosure of irregularities. For instance, the Protected Disclosure Act (PDA) is a legislation which seeks to offer such protection in a bid to encourage workers to maintain high standards of ethical conduct. This manages to protect an individual working in any sector from occupational detriment likely to arise as a result of an exposure (Securities, 2015). This means that if Robert reports the matter to the SEC, he is guaranteed that he might not lose his job. Besides, the Act also offers assurance on the various remedies that could be taken in a situation that occupational detriment occurs (Securities, 2015). Moreover, the employee is in a position to know the necessary steps that should be taken while disclosing information regarding their employer.

Currently, the Dodd-Frank Financial Reform Act has established new standards for whistle-blowers whose disclosure the top management of their firm seeks to stifle through intimidation. For instance, the auditors or accountants who make disclosures about financial irregularities are likely to get a reward for their honesty. This prize is based on a percentage of the amount recovered because of the disclosure. It is also necessary to note that the Act promotes the initiation of lawsuits by employees against their employers for wrongful dismissal following an exposure (Reform, Act & Protection, 2019). At the same time, the employee can seek a reinstatement, litigation costs and compensation on the money spent on attorney fees from their employer in the event that they sue them for dismissal (Reform, Act & Protection, 2019).

How far

The extent to which Robert should take this matter will be dependent on the actions that Jerry takes against him for disclosing the anomaly noted. After unveiling the financial irregularities that his superior is seeking to hide by covering up the mistakes of Bigelow`s dealership, it is likely that Jerry will dismiss him from work judging from the threat issued earlier on. In such a situation, he should take up the matter in court seeking reinstatement for wrongful dismissal. Besides, Robert should also seek compensation for the financial costs he has had to withstand throughout the entire period. There is a high chance that Robert will have the matter resolved in his favor based on the various acts that exist supporting whistle-blower practices and also since because of his decision to uphold his ethical conduct.

Conclusion

To sum it all up, it is evident from the illustrations above that the best action that Robert should take in this case is to "blow the whistle." He should, however, approach the matter with a lot of caution by seeking counsel from a lawyer. Later on, Robert is required to report the matter to the Securities and Exchange Commission. The necessary measures will then be taken up, and in the event that his employer dismisses him from work, it would be advisable for Robert to take legal action against him seeking to be reinstated and financially compensated. Finally, Robert`s case serves to enlighten individuals working in auditing firms to stick to the stipulated ethical code of conduct regardless of the situation that they are facing.

References

Ferramosca, S., D'Onza, G., & Allegrini, M. (2017). The internal auditing of corporate governance, risk management and ethics: comparing banks with other industries. International Journal of Business Governance and Ethics, 12(3), 218-240.

Reform, F. W. S., Act, C. P., & Protection, C. C. F. (2019). Dodd-Frank Act. Pub. L, 111-203.

Securities, U. S. (2015). Exchange Commission (SEC). (2007). Bristow Group, Inc., Form.

Sweeney, J. T., & Roberts, R. W. (1997). Cognitive moral development and auditor independence. Accounting, Organizations and Society, 22(3-4), 337-352.