Ethics and Auditing

As the world of accounting rapidly grows and expands, so does the issues and complications associated with the process. The auditing process is a major part of Accounting. The issues about ethics in relation to Accounting process are becoming a more serious problem in today’s world. The Accounting process is highly sensitive, because it deals with what many people consider one of the most important thing in life: “money” Accounting incorporates a variety of functions- such as auditing- in which activities must be carried out with utmost care, adequacy and most importantly, the appropriate use of ethical judgments. The public generally depends on auditors to provide accurate information in regards to financial data. Auditors are supposed to be highly skilled in their occupational field, and very trustworthy because they are dealing with the financial data concerning people and organizations. In this day and age, the trust that people embed on auditors has drastically declined due to the high profile financial disasters involving accounting fraud and deceptive acts. These events have reduced the high integrity that was once associated with Accounting professions, and has made the public very suspicious of auditors. In the article, Ethics and Auditing Culture: Rethinking the Foundation of Accounting and Auditing, David Satava and his co- authors believe that the root of all the problems and fraudulent actions in Accounting is the fact that the people involved are abusing and manipulating the rules of accounting practices. The fact that financial accounting originated and functioned strictly on a rule basis provided an opportunity for people to bend the rules and get away with illegal actions including the infamous scandals associated with Enron, Arthur Andersen, Martha Stewart, etc. Many accountants rely heavily on rules, even when it is clearly not the right or moral course of action. Although, it is good to follow rules, people tend to abuse rules