Auditing: CSSC Six-Step Approach for Ethical Delimmas
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Business people facing ethical dilemmas are not uncommon; however, how one chooses to resolve the situation is critical. At CSSC, a six-step approach has been used very successfully. They are these:
Obtain the relevant facts.
Identify the ethical issues form the facts.
Determine who is affected by the outcome of the dilemma and how each person or group is affected.
Identify the alternatives available to the person who must resolve the dilemma.
Identify the likely consequence of each alternative.
Decide the appropriate action.
Using this six-step approach, list three ethical dilemmas a CPA at CSSC might face, resolve the dilemmas, and decide the appropriate action.
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Solution Summary
The cited solution list eight possible ethical delimmas which could provide a very good basis for the six step approach to resolve situation. Next the solution expands on three of the eight delimmas complete with examples and possible remedies to solve the issues. This solution is 769 words.
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I found a perfect website which basically outlines your exact type of problem:
http://www.cpaireland.ie/UserFiles/File/Technical%20Resources/Ethics/Ethical%20Dilemnas%20-%20FAQs%20May%202006.pdf
It is CPAs of Ireland, but ethical issues appear to be the same in the US as well as Western Europe (and of course, procedures should be identical within a very few years).
Following are the types of ethical dilemmas which could provide a very good basis for your six step approach as copied from the article referenced above.
Dilemma One - Non-Audit Services
Dilemma Two - Fee Levels
Dilemma Three - Ethics Partner
Dilemma Four - Long Association with the Audit Client
Dilemma Five - Commencement in Practice
Dilemma Six - Financial Interest in a Client
Dilemma Seven - Business relations with audit clients
Dilemma Eight - Policies and Procedures
Following is how I would develop one. Fees levels: the facts are that one of your audit clients is becoming so large that the fees represent 15% of the revenues of the CPA firm. The ethical issue is that your firm may become too dependent on those fees, and in doing so, the ...
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