In events, Time is set by the CM and the rate is set to 1. This means the clock in the cockpit is accurate to the time of the event. However, this time must be set to day else it would be night time.
Here is an example:
FSO starts at 11 PM ET. I set the time in the arena to 1100 and at 1300, the event is over. On everyone's clocks in the cockpit they can see that the event begins at the top of the 11th hour and ends and the top of the 1st hour. This way, every pilot in the event can easily recognize how much time is left.
A good idea about standard time, but we have the next best thing. In Scenarios, the CM sets the clock to 1030 or so and the event ends at 1330. We cannot set it to be in the afternoon or real time because we would have darkness in the arena.