Audit Overtime. The performance evaluation of all accountants is based in part on theirability to do audit work efficiently and within the time budget planned for the engagement.New staff accountants, in particular, usually have some early difficulty learning speedywork habits, which demand that no time be wasted. Cynthia Elizabeth started work for Julieand Jacob CPAs in September. After attending the staff training school, she was assignedto the Rising Sun Company audit. Her first work assignment was to complete the extensiverecalculation of the inventory compilation using the audit test counts and audited unit pricesfor several hundred inventory items. Her time budget for the work was six hours. She startedat 4 P.M. and was not finished when everyone left the office at 6 P.M. Not wanting to stay downtown alone, she took all necessary audit documentation home. She resumed work at8 P.M. and finished at 3 A.M. The next day, she returned to the CPA offices, put the completed documentation in the file, and recorded six hours in the time budget/actual schedule. Her supervisor was pleased, especially about her diligence in taking the work home.Required:a. What do you think about Elizabeth’s diligence and her understatement of the time shetook to finish the work?b. What would you think of the case if she had received help at home from her husband Paul?c. What would you think of the case if she had been unable to finish and had left the workat home for her husband to finish?
Audit Overtime. The performance evaluation of all accountants is based in part on their
ability to do audit work efficiently and within the time budget planned for the engagement.
New staff accountants, in particular, usually have some early difficulty learning speedy
work habits, which demand that no time be wasted. Cynthia Elizabeth started work for Julie
and Jacob CPAs in September. After attending the staff training school, she was assigned
to the Rising Sun Company audit. Her first work assignment was to complete the extensive
recalculation of the inventory compilation using the audit test counts and audited unit prices
for several hundred inventory items. Her time budget for the work was six hours. She started
at 4 P.M. and was not finished when everyone left the office at 6 P.M. Not wanting to stay downtown alone, she took all necessary audit documentation home. She resumed work at
8 P.M. and finished at 3 A.M. The next day, she returned to the CPA offices, put the completed documentation in the file, and recorded six hours in the time budget/actual schedule. Her supervisor was pleased, especially about her diligence in taking the work home.
Required:
a. What do you think about Elizabeth’s diligence and her understatement of the time she
took to finish the work?
b. What would you think of the case if she had received help at home from her husband Paul?
c. What would you think of the case if she had been unable to finish and had left the work
at home for her husband to finish?
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