Dave Gordon FCA, Senior Partner in one of the large public accounting firms, is

Question

Dave Gordon FCA, Senior Partner in one of the large public accounting firms, is in a quandary. He has just realized that, although he has followed the Ontario Institute of Chartered Accountants’ Rules of Conduct with respect to advising the incumbent auditor when he has been asked to undertake an assignment other than a financial statement audit from the incumbent’s client (and has always done so), that many of the other partners in his firm and, in fact, probably many partners in most of the larger firms are not following the rule. A particular concern to Dave is that several times the incumbent auditors of prospective clients have objected to his firm undertaking the work and have spoken to the client with the result that his firm was not retained. In short, his firm has lost business because he has followed the rule. Dave is preparing a memo to his partners and is puzzled as to what course of action his firm should follow. He has informally discussed the rule with his peers at the other larger firms and they have indicated that they feel the rule is not important and that they do not propose to change their firm policy with respect to it. On the other hand, he believes his firm has always prided itself on being a stickler for following the "letter of the law."

What should Dave suggest to his fellow partners in the firm and why?

How can Dave make a decision using Kohlberg’s stages of moral development?

Could Dave see the moral justification of others in their decision to alter or not follow the rules?

Can Dave justify the loss of business as a right decision in view of firm goals?

Explanation / Answer

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