ACCT20080 - Mavin Smith: Case Study Assignment Help

Written Assessment 1

Case:  Mavin Smith

Mavin Smith is a senior auditor in a public accounting practice firm. His firm is popular with the local community because his Chief Financial Officer (CFO) is local. One of Mavin’s clients, an elderly local businessman called Bob Miaow insists that the CFO always comes to his office to discuss his financial arrangements. While there, Bob always insists on sharing coffees with CFO while they discuss business. Mavin has realised for a long time that this is normal with this client. Part of Mavin’s firm success is the effort the CFO has put into nurturing the relationship with Bob. Owing to this relationship Bob always felt comfortable with Mavin and his team.

Due to this relationship, Mavin’s firm has become more dependent on Bob’s business. Mavin observed that Bob has been becoming more demanding, and Mavin is concerned about the issue. In the past, Bob overruled Mavin’s accountants on small matters. Now Bob wants Mavin to post an end-of-financial-year adjustment to operating expenses that Mavin believes to be a material amount. Mavin asked Bob to provide the required supporting documents for the adjustment. Bob was unhappy about it and discussed the matter with Mavin’s CFO.

Mavin’s CFO wants him to post the end-of-financial-year adjustment to the operating expenses of Bob Miaow’s business (that Mavin believes to be a material amount), yet Bob is not ready to provide any supporting documentation to accompany the adjustment. When Mavin tells the CFO that he needs proper evidence and his written authorisation, the CFO responds by saying "I thought you were a team player! Maybe I was wrong. I'll have to do something about that. Am I wrong?"

 Case:  Christine Lee

Christine Lee is a production manager of a company that manufactures car parts for a renowned car manufacturing company. Christine joined the company 7 years back and introduced a performance-based payment system in the company. A performance-based payment system is not very common in manufacturing industries in that locality. In this system, employees are paid based on the number of units they produce, and the quality of the units produced.  Employees are normally paid below-average hourly pay but high bonuses. Therefore, efficient employees are earning above-average incomes. Employees with long-time experience receive salaries from $85,000 - $95,000. Most experienced employees like the system because they are earning very good compensation and they can personally influence their earnings.

However, some employees do not like this system because they are not able to keep up with the intensive production methods. As a result, they are earning less compared to experienced employees. Therefore, they want more payment security from their job. In addition, they are critical that there are no health plans incorporated into this payment system. However, as an experienced employee like this payment system, Christine is not ready to modify the current payment system. Employees who do not like this system and who are unable to cope with the intensive production methods ultimately leave the company.

Robert Drinkwater and three of his friends who joined the company two years back are very unhappy with this pay system because they are unable to cope with the intensive production methods and earn less compared to experienced employees. They feel that the pay system is unfair to them and are looking for another job.

However, Kith Wong and his five friends who have worked for the company for the last 6 years like the system as they are earning very good salaries and are happy that their experiences and efficiencies are rewarded.

 What do you have to do?

Part A: Using an ethical decision-making model (500 words max)

Take Mavin Smith through the AAA decision-making model step-by-step and arrive at the best ethical outcome for him.

Part B: Using APES 110 (1,000 words max)

Mavin Smith is a Chartered Accountant and so are the accountants in the firm, and therefore APES 110 applies to all of them.

Advise Mavin Smith of the provisions of APES 110 that are relevant here, especially the fundamental principles, types of threats and relevant safeguards. Advise Mavin Smith of what he must do to be compliant with APES 110.

Part C: Applying theories of ethics (1,000 words max)

You must undertake independent research into the theories of egoism, and utilitarianism. Now apply them as follows assuming that you are an expert in business ethics.

1. Analyse the ethical issues of Christine Lee’s case using the theory of egoism.
2. Analyse the ethical issues of Christine Lee’s case using the theory of utilitarianism.

In each case, you must identify the key features of the theory being used and show how they apply to the case. Conclude the section by explaining how a theoretical knowledge of ethics will help Christine deal with the ethical issues.

You must submit:

You must submit an individually written report about ethical behaviour and ethical decision-making in the following format:

1. Title Page
2. Executive Summary
3. Introduction
4. Report of a maximum of 2,500 words, consisting of Parts A, B and C (as shown above). Use headings to clearly indicate which part is being answered.
5. Conclusion
6. References

 A note concerning referencing:

You must use the American Psychological Association (APA) referencing style. You must reference all of your references, every time you use them.

Penalties of up to 3 marks may be deducted for poor referencing. Suspected plagiarism will lead to your assignment being reported for misconduct.