Business Ethics Now 3rd Edition by Andrew Ghillyer

Exercise 58

L ara was beginning to realize that the Sarbanes-Oxley Act was a mixed blessing. Greater scrutiny of corporate financial reports was meant to reassure investors, and it was certainly bringing her firm plenty of business, but now she was faced with this "small favor" to her boss. On the face of it, she couldn't really understand why they just didn't tell this guy that they only worked with clients worth a dollar figure that was higher than his company's valuation and be done with it, but Bartell was so paranoid about their reputation, and he was convinced that the next big client was always just around the corner.
Lara spent a couple of hours reviewing the file. Bartell's assessment had been accurate-this was a simple audit with no real earning potential for the company. If they weren't so busy, they could probably assign a junior team-her team perhaps-and knock this out in a few days, but Bartell had bigger fish to fry.
Lara thought for a moment about asking Bartell to let her put a small team together to do this one, but then she realized that by not delivering on the small favor he had asked, she could be ruining her chances for getting assigned to some of the bigger audits down the road. So she ran the numbers, multiplied them by 4, and submitted the price quotation.
Unfortunately, the quotation was so outrageous that the small business client complained to the PCAOB, which promptly wrote a letter demanding a full explanation of Lara's company's pricing schedule.
What do you think will happen now