1. What alternatives are available to Brent in regards to the audit of payables? What are the pros and cons of each alternative?
Brent has the option of “eating time” as Han has suggested. This means working off the clock but he will be able to finish under budget and look good at the firm. However, this will have an adverse effect for future budgets making it seem like the audit can be completed in less time than is even possible. Also, it fails to show the accurate cost of completing the audit. Brent also has the option of lowering the number of payables tested. If he decided to do this, Brent would be able to complete his work in less time, possible under budget and allow him to spend the rest of the time with his wife. However, skipping the testing of these other transactions can lead to a misrepresentation of the audit. Brent could also ignore Han and Megan’s advices and to the work correctly, regardless of making budget. This approach will get the job done correctly. However, doing this will result in an over budget audit report and may receive a bad evaluation from the senior auditor. Brent could also talk with John about his concerns. John may be able to provide insight into Brent’s issues and help him resolve them. However, John may see Brent as a threat to him completing the audit under budget and may give him a bad evaluation if they end up over budget.
2. What consequences for Brent, the auditing firm, the others involved, may arise from “eating time,” as Han suggested? Similarly, what consequences for Brent, the auditing firm, and others involved, may arise from not completing audit procedures, as Megan suggested?
Han’s suggestion can cause future budgets to be misleading when preparing for next year’s audit; they will look at this year’s budget and base the numbers off of it. Also, next year’s auditors will be put in the same situation, a lot of work