ETHICS AND ITS THREATS TO AN AUDITOR

Topics: Auditing, Ethics, Audit Pages: 11 (396 words) Published: May 24, 2015
ETHICS AND ITS
THREATS TO AN
AUDITOR
BY
UADIA CHRISTOPHER
14027674

Ethics






Ethics can be defined broadly as a set of
moral principles or values
The word “Ethics” was derived from the
Greek word ethos, meaning ‘character’.
Ethics are standards of behaviour that
describes how people react when they
encounter different situations

Ethics for Professionals





The professional Ethics code is a part of
Ethics which answers the question: how
should the profession be practised?
Professionals are expected to conduct
themselves at higher level than most
other members of society

Ethics for Auditors








Act as a guideline for ensuring the professional
attitudes and conducts in a way that it enhances
the image of the auditing profession
They are essential in protecting an auditor
reputation
Auditors must be completely trustworthy,
honest, fair and diligent, which reflects
expectations from the profession
The code of Ethics emphasis on the
independence of the auditor during the audit
process

IFAC code of Ethics
Code establishes a conceptual framework that
requires a professional accountant to identify,
evaluate, and address threats to compliance
with the fundamental principles, which
includes:
a. Integrity
b. Objectivity
c. Professional competence
d. Confidentiality
e. Technical standards


Framework for code of
Ethics






Identify threats to compliance with the
fundamental principles
Evaluate the significance of the threats
identified
Apply safeguards, when necessary, in
order to eliminate the threats or reduce
them to an acceptable level

Threats






Self-interest threats
Self-review threats
Advocacy threats
Familiarity threats
Intimidation threats

Self-interest threat:
 The threat that a financial or any other
interest will influence the auditors judgement
Self-review threat:
 The threat that an auditor prepares the
financial statement and then audit them
Advocacy Threat:
 The threat that a client or employer position
is been promoted to the point that the
auditors objectivity is compromised

Familiarity threat:
 The threat that an auditor has a close or
long-standing relationship with clients or
individuals, thereby having too much trust
on the clients
Intimidation Threat:
 The threat that an auditor will be deterred
from acting objectively because of pressure .

Safeguards






An audit committee that provides
appropriate oversight, thereby limit the
relationship between the directors and
the auditor
Educational, training and experience
requirements for entry into the
profession
Policies and procedures that emphasize
the client’s commitment to fair financial
reporting

“A MAN WITHOUT ETHICS IS A WIDE
BEAST LOOSED UPON THIS
WORLD” ‘ALBERT CARMUS’
THANK YOU.....

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