Ethics in Action Tonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks salary. On...

Ethics in Action

Tonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks salary. On November 15, the firm's management team announced that there would be no annual bonus this year. Because of the firm's long history of giving a year end bonus. Tonya and her coworkers had come to expect the bonus and believed that Cabbally and Kennedy had breached an implicit agreement by discontinuing the bonus. As a result, Tonya decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. Cannally and Kennedy's policy is to pay overtime at 150% of striaght time.

Tonya's Supervisor was surprised to see overtime being reported, there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the "honor system" in reporting their work hours.

1. Is cannally and kennedy acting in an ethical manner by eliminating the bonus?Explain your answer.

2. Tonya behaving ethically by making up the bonus with unnecessary overtime? why or why not?