Audit-5 Fundamental Ethics
In the business world nowadays, being ethical is vital to maintain the confidence of consumer. Meanwhile, the professional ethics of auditors are more significant to increase usefulness of financial statement and users’ confidence towards financial statement.
5 professional ethics that auditors must possess are (1) Objectivity, member should not allow bias, conflict of interest or undue influence of others to override professional or business judgement. (2)Professional behaviour, member should comply with relevant laws and regulations and should avoid any action that discredits the profession. (3) Professional competence and due care, members have a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives based on current development in practice, legislation and techniques. Members should act diligently and in accordance with applicable technical and professional standards when providing professional services. (4)Integrity, members should be straight forward and honest in all professional and business relationship. (5) Confidentiality, member should respect the confidentiality of information acquired as a result of professional and business relationship and should not disclose any such information to third parties without proper and specific authority or unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationship should not be used for the personal advantage of members or third parties. If these 5 principles are adopted by an auditor, it can be said as an ethical auditor.
In the past decades, various problems have been arising which can completely influence the ethics of auditors in the current business environment. (1) Self-interest threat, this occurs when an auditor has a beneficial interest in a client’s performance. Example, when the auditor or their family owns shares in a client. They would
5 professional ethics that auditors must possess are (1) Objectivity, member should not allow bias, conflict of interest or undue influence of others to override professional or business judgement. (2)Professional behaviour, member should comply with relevant laws and regulations and should avoid any action that discredits the profession. (3) Professional competence and due care, members have a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives based on current development in practice, legislation and techniques. Members should act diligently and in accordance with applicable technical and professional standards when providing professional services. (4)Integrity, members should be straight forward and honest in all professional and business relationship. (5) Confidentiality, member should respect the confidentiality of information acquired as a result of professional and business relationship and should not disclose any such information to third parties without proper and specific authority or unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationship should not be used for the personal advantage of members or third parties. If these 5 principles are adopted by an auditor, it can be said as an ethical auditor.
In the past decades, various problems have been arising which can completely influence the ethics of auditors in the current business environment. (1) Self-interest threat, this occurs when an auditor has a beneficial interest in a client’s performance. Example, when the auditor or their family owns shares in a client. They would