ETHICS VERSUS RULES IN AUDITING

Ethics versus rules in auditing



Ethics versus rules in auditing

Introduction

Audit is an independent verification of the financial statements for the reliability of the information in. An audit involves certain processes and procedures designed to verify if a true and fair financial statements posted on a company reflects the results of its operations. An audit also assumes a certain level of understanding of issues and analysis (Fried, C., 1997, pp. 49-96).

There are certain ethics and rules in auditing that are essential to be complied with. These ethics and rules are framed to serve as guidelines for the auditors performing an audit.

Discussion

Ethics of Audit

Code of Ethics of audit consists of nine sections: 1. Behavioral model of the auditor and audit firm. 2. Conclusion of a contract to provide professional services. 3. Conflict of interest. 4. A second opinion. 5. The fees and other emoluments. 6. Advertising and offering professional services. 7. Gifts and favors. 8. Applying the principle of fairness for all types of services. 9. Applying the principle of independence in the tasks to validate the information.

The first section identifies the main principles of professional ethics of auditors and guidelines for their application, made in the form of behaviors of the auditor and audit firm. Application of behavior reveals the threat of violation of basic principles, to assess their seriousness, and if necessary, take precautionary measures (Gowthorpe, C. & Blake, J., 1998, pp. 221-254).

Independence of the judgments and opinions of the auditors - is provided by the fact that he is not in the public service, not a regular employee of any non-audit organizations and therefore must carry out their duties, i.e. carry out audit activities. The auditors also should not be financially interested in the activities of the audited company, in other words, neither they nor their relatives can be owners, shareholders or shareholders in the audited companies.

Objectivity and fairness - as unacceptable bias, bias, conflict of interest, other factors in forming opinions on the financial statements, professional competence and due care, means that the auditor provides professional services with due care, competence diligence, his responsibilities include the continuing maintenance of professional knowledge and skills at a high level, so that the audited organization or employers could take advantage of competent professional services based on the latest developments in practice, legislation and technologies.

Code of ethics mentions privacy. The auditor must maintain the confidentiality of information obtained in the course of providing professional services and shall not use or disclose such information without proper and specific to that office, except when disclosure is dictated by its professional or legal rights or obligations; Professional conduct of auditors should be such as to maintain the good reputation of the profession - the auditor should refrain from any conduct that could discredit her. The auditor is obliged to be honest, truthful and must not: - Making statements that exaggerated the level of services it can provide its expertise and experience gained by them;

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