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Ethics in Auditing - Research Paper Example

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Name of Student: Lecturer: Date: ? Introduction Auditing is an impartial examination and assessment of an organization’s financial statements, which may be done internally by specialized staffs within the organization or by external auditors, who may be consulting firms or other competent individuals outside the organization…
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Ethics in Auditing
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Download file to see previous pages An auditor is a business professional with the responsibility to assess various features of an organization, individual actions or project implementation to ascertain that resources are used efficiently, which includes finances, labour, inputs and any other factor of production that may affect business efficiency as well as the authenticity of the financial accounts of the business. The auditor is expected to provide an audit report with recommendations concerning the amendment of inaccurate entries and situations that may negatively affect the organization. Auditors are expected to adhere to professional ethics and in a manner that promotes the organization’s well-being. This paper focuses on ethical standards in auditing and why those standards are important. It also highlights ethical auditing violations and how they can be avoided. Ethical Standards in Auditing McWilliams & Nahavandi (2006) highlight the code of ethics in auditing whereby ethical standards and expectations need to be adhered to with regards to the conduct of individuals and organizations in an audit process. Auditors need to be morally responsible for their actions in the process of auditing and need to understand their impact on the future of the organization. An audit report may lead to improvement of business competitiveness, but on the other hand it may also result in dire consequences such as termination of contracts, employment, fines and lawsuits. Professional ethics is therefore an important component in auditing. Public confidence is achieved through adherence to good code of ethics, which reflects effectiveness and efficiency. Ethical standards give an organization and the public the reassurance needed with regards to risk control and effectiveness (Beauchamp & Bowie, 2010). Auditors are expected to maintain integrity in their actions, which is an important indicator of trustworthiness and hence the reliability of their findings and final conclusion. According to McWilliams & Nahavandi (2006), auditors need to observe the values of independence, impartiality in their judgement, high moral standards with regards to professional demeanour as well as unconditional honesty in their activities. Conflict of interest is a vice that needs to be avoided in auditing since it may lead to biased results. Fear or favour may also influence the outcome of auditing since the auditor may avoid certain aspects that may help unveil important loopholes through which organizational efficiency is likely to be lost. Auditors need to exercise unmatched standards of even-handedness, honesty and ethical behaviour. They need to accomplish their work with uprightness, meticulousness and accountability while observing the law (Jamal, 2004). They are obligated to make disclosures stipulated by the law and in line with professional obligations. They should avoid situations that may unintentionally lead them to be party to any unlawful activity or get involved in actions that are disreputable to the auditing profession or to a business. Howieson (2003) notes that auditors need to demonstrate respect for the work of fellow auditors whether in the same or different organization and also recognize their distinct capabilities are areas of competency. Respect for other players in the audit profession promotes good work relations and possibility of future collaborations. Objectivity is the frame of mind ...Download file to see next pagesRead More
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