Case 7.3 Bud Carriker, Audit Senior
AC606
Spring, 2015
Synopsis
Bud Carriker was raised in New Orleans by his grandmother after his mother passed away during childbirth and his father continued his career in the military. His father was an African American father from New Orleans and his mother was a Mexican American from Texas. He was reunited with his father and new family during his high school years and his father encouraged him to pursue accounting. He took the advice from his dad and majored in accounting, graduating and starting his career in public accounting directly after college in order to continue his professional goal of becoming a controller or CFO of a financial institution. Bud started out as a staff accountant and progressed to audit senior with 2 years of working at the public accounting firm. By his fifth busy season, he had decided that he would soon leave his current position to pursue other opportunities. Just prior to leaving his current firm, Bud was notified by Alex Saunders, the managing partner at the practice that he was to be assigned to a new client in the banking and financial services industry. Bud was excited about this new client as this would provide him some much needed real world experience in just the field he was looking to pursue. After attending a three day seminar on bank auditing and spending several days reviewing the clients previous years’ work papers, Bud had his initial meeting with the new clients CEO, Jim Charles. Bud felt like the CEO seemed annoyed and the meeting was cut short, but dismissed it as a coincidence. A few days later, Saunders called Bud into his office and notified him that he would be taken off the new audit and placed back on his previous assignment. After some coaxing, Saunders finally told Bud that Charles had requested a different audit senior and was uncomfortable working with Bud, implying that his removal was due to his race. Bud finished out the season working on his original assignment. He was later promoted to audit manager but did not accept the position, instead accepting a position as a controller with a large healthcare facility. Jim Charles banks were eventually closed by regulators citing “unsafe and unsound” operating practices.

Summary of Key Facts

* Bud Carriker was raised in New Orleans and was of Mexican and African American heritage. * Bud majored in accounting in college and after graduating began working for a public accounting firm. * Bud eventually was interested in becoming controller or CFO of a financial services institution. * After 2 years Bud was promoted to audit senior. * During his fifth year with the public accounting firm, Bud had the opportunity to work with a new client, a bank. * Bud was excited about working in the financial services sector. * After attending a three day banking audit seminar and reviewing the previous years’ work papers, Bud met with the CEO of the bank, Jim Charles. * Before Bud had even finished drafting the audit plan, he was removed from his new audit client by his audit manager, Alex Saunders. * After some back and forth, and Bud requesting some explanation for the change in audit engagement, Saunders revealed to Bud that the CEO Charles had requested a new audit senior due to Buds ethnic background. * Bud was removed from the banks engagement and finished out the season at his previous audit engagement. * Soon after that Bud went to work for a large healthcare facility as the controller. * Some time later, Jim Charles banks were shut down by regulators citing unsafe and unsound practices.

Case Questions

1. Saunders should have explained that his firm has a no discrimination policy and then proceeded to discuss the situation with his HR dept. If I had been Saunders I would have politely explained that our firm is an equal opportunity firm and gone on to explain why I thought that Bud was more than qualified to handle the audit engagement. If Saunders continued to request that Bud be removed from the engagement I might have suggested to an audit partner that the firm remove itself from the banks audit engagement. 2. Saunders decision to comply with Charles was unethical and unprofessional. It violates civil rights standards and is embarrassing. I would have approached some of the audit partners at the firm and asked how the situation should be handled. What if Charles had asked Saunders to violate some other standards, would Saunders agree? I would not want to work for a firm that supported that kind of behavior in a client and continued to represent them. 3. Bud reacted very professionally and probably did the right thing to protect himself and all his hard work towards his accounting career. Although civil rights are protected in the United States, you never know what will happen once you start disrupting the environment in a professional office. If Bud had overreacted or decided to pursue a civil rights case he might have had a hard time finding employment in the future. 4. I believe that the same thing could happen now, except that an employee has more outlets to determine if their rights have been violated and determine how to best pursue fair treatment. Even now, Bud still might have decided to stay under the radar and simply change employers to avoid future repercussions.