Introduction
This semester's Advanced Auditing course gave a review of several important factors which are
significant in auditing. Among the various topics covered, three areas stood out as particularly
impactful; the ethical obligation of the accountants, the role of internal controls and difficulties
in auditing high-risk accounts. All of these areas not only demonstrated the issues that surround
the auditing process but also the knowledge and ethical standards that are required of auditors.
This essay seeks to explore these three areas and analyze the main learning that could be taken
out of it for professional practice.
Ethical Responsibilities of Accountants
Among all the topics studied throughout the semester, the topic of ethical duties of accountants
was one of the most important. The professionalism of accountants is essential for the reliability
of financial information and the confidence that users have in financial statements. Ethical
responsibilities relate to a wide range of activities that involve integrity, objectivity, professional
competence, confidentiality, and professional behaviour.
Accountants should be individuals of high ethical standards in that they should not engage in any
activity that is considered unethical. This responsibility is crucial because it has a direct bearing
on the accuracy of information presented in the financial statements. In fact, according to
Endenich and Trapp (2020), it is important for management accounting and control to be ethical
in order to build trust with the stakeholders of the organization. Ethical practices by an
accountant minimize fraudulent activities and offer a true and fair view of the financial situation
of an organization.
Another requirement of ethical standards for an accountant is the concept of objectivity.
Professional accountants are required to be neutral and should not be put in a position where
their independence is compromised. Brief (2020) talks about the historical approach to the
accountant's liability and highlights that neutrality is crucial to the auditor's position as an
independent third party. Due care and professional competence make it mandatory for
accountants to acquire new knowledge and skills that will enable them to discharge their duties.
This commitment to continuous learning allows accountants to meet the changing standards and
regulations within the profession.
Confidentiality is equally crucial to performance due to the fact that accountants generally work
with sensitive information pertaining to their clients' finances. Preserving confidentiality not only
serves the client's needs but also strengthens the confidence in the accountant as a professional.
Lastly, professionalism requires that accountants conduct themselves in a manner that is
acceptable in the profession and in a manner that will not bring the profession into disrepute.
Importance of Internal Controls
Internal controls are defined as policies, procedures, and measures put in place by a company to
prevent irregularities in financial and accounting processes. This topic was significant in
providing insights into the way organizations protect their assets and the integrity of their
financial disclosures. It is a fact that internal controls are essential for minimizing and or
preventing errors and fraud in an organization. According to Fernandhytia and Muslichah (2020),
internal control systems can mitigate instances of accounting fraud. Adopting effective internal
controls enhances a firm's structure by ensuring that employees are conscious of their roles and
obligations in the implementation of policies and adherence to standard procedures. This
systematic approach also helps reduce risks associated with financial statement fraud.
Furthermore, internal controls contribute to the operational effectiveness of an organization by
maintaining compliance with processes. They also help establish ways and means of getting rid
of noncompliance with the laws and regulations, thus shielding the organization from legal and
financial consequences. The course also focused on certain aspects of internal controls, such as
the control environment, risk assessment, control activities, information and communication, and
monitoring activities. Awareness of these components will enable auditors to assess the
adequacy of an organization's internal control system.
Auditing High-Risk Accounts
Different characteristics of auditing high-risk accounts present special problems and call for
various skills and approaches. These accounts are expected to have a higher probability of
material misstatements because of fraud or errors. These accounts often require a higher degree
of judgment and estimation, a large number of complex transactions, or experience with past
problems.
When auditing high-risk accounts, auditors must use a risk-focused approach where they
concentrate their audit tests and procedures on the risky areas. This entails vital activities such as
risk assessment procedures, entity and environment profiling, risks of material misstatement, and
designing and implementing responses to those risks. The course focused on various approaches
to auditing high-risk accounts, including analytical procedures, substantive testing and data
analytics. These techniques assist the auditors in obtaining adequate and relevant evidence to
support their audit report. Moreover, the course pointed out the necessity of professional
scepticism while auditing high-risk accounts. The evidence needs to be critically evaluated, and
auditors need to be constantly on the lookout for conditions that may suggest risk of
misstatements due to fraud or error. Auditors must be acquainted with inherent risks pertaining
to high-risk accounts and the suitable audit response to ensure appropriate and efficient audits.
This knowledge enables auditors to offer reasonable assurances of no material misstatement of
the financial statements, thus increasing the reliability and credibility of the financial reporting
process.
Conclusion
The Advanced Auditing course has helped me learn a lot about ethical issues in auditing, internal
control systems, and the difficulties of auditing risky accounts. These topics are critical to the
understanding of auditing and demonstrate the skills and ethical practice required by auditors.
Ethical recommendations, strong internal controls and a risk-focused approach to auditing high-
risk accounts are crucial in enhancing the quality and credibility of financial reporting. The
knowledge acquired throughout this course will undoubtedly provide a foundation for a
promising career in the auditing profession.
