Hamilton Wong Case Essay Example

or assignments on an audit engagement is to bill their clients on the work that has been done. This is done by keeping accurate record of the time worked on each account and the engagement as a whole. This also helps budget time for future audits based on the amount of time that it took in previous years. This is of great help to management at the accounting firm planning the audit. The underreporting of time has many implications for individual auditors along with their colleagues and the quality of the audit. By underreporting hours, managers will not know the true hours worked to complete the audit, thus budgeting less time in the future making it harder on everyone on the audit team. By budgeting less time, this can cause everyone to be in a rush and make careless errors next time.

Accounting firms can take several measures to ensure that time budgets do not interfere with the successful completion of an audit. One way to do this is by budgeting time correctly based on past records, assuming they are correct and not underreported, as Hutchinson has done. By budgeting the correct time for everyone to complete the audit, it should come out without any errors caused by rushing to meet the deadline. Another way they can ensure that time is reported correctly is by instilling a good work ethic as part of their businesses culture. Make it known to employees that underreporting time is unethical and unacceptable in this firm. They can enforce this with punishment if an employee is caught doing so. They can also prevent the problem from happening by having

workshops or seminars on ethical behavior when on an audit assignment.

Accounting firms can take several measures to reduce the likelihood that personal rivalries among auditors of the same rank will become dysfunctional. They can do this by instilling a non-competitive nature in their firm, making employees see that working together on an audit engagement as a team is far more beneficial than trying to do better than one of your teammates. It is important to work as a team at all times and not let personal motivating factors and selfishness give way to the team or engagement becoming dysfunctional.

This can be a part of the mandatory seminars that first or second year employees must attend, as I touched upon in the answer to question 3. Also, incentives such as promotions and bonuses should not just be focused on personal performance. If one individual is soaring and performing at a high level, but is not engaging his or her team it will stead lead to an unsuccessful audit engagement. Incentives should also be based on a teamwork-based approach, as this will likely lead to the best quality audits that the firm can perform.

This should be a part of the firms vision and clearly stated in something like their overall mission statement. If this is clear to all employees, it will hopefully tell them that the success of the entire firm is what is most important, not just their own personal success or how fast they can complete their own part.