All auditors are held to a code of ethics. The main principles in this
code include integrity, objectivity, confidentiality and competency. Ethics
case 1-8 asks the question, “How might an auditor’s ethics be challenged
while performing an audit?” It is argued that an auditor cannot be truly
objective if they are collecting a fee from the company whom they are
auditing (Spiceland, Sepe, & Nelson, 2013).
For this case we will focus on objectivity. As an auditor one is required
to remain objective, an auditor should at all times remain independent in fact
and appearance.
They should take special precautions to assure there is no conflict of interest.
An auditor is required to make an unbiased opinion on the financial stability
of an organization (Schumerhorn, 2012).
It is customary to charge a fee for auditing services, this is how
auditing firms produce revenue to support their business and employees.
However if this fee comes from the agency in which is being audited this firm
is subject to scrutiny in regards to the audit. Independent auditors have been
profoundly scrutinized based on the risk that an auditor may be swayed by
the financial side of their agreement.
A conflict of interest would make it difficult for an auditor to remain
objective during an audit. A firm must take every precaution to assure there
is no conflict of interest before commencing an audit. Conflict of interest is
not always easy to see. At times it would appear there is a conflict of interest
but there truly is not. But the appearance of a conflict of interest can be as
harmful to the auditor as a true conflict of interest. This is why the Bible tells
us to abstain from all appearances of evil (1Thessalonians 5:22).
While it is possible to remain objective in an audit, it is not always
going to appear that you have remained objective. It is important to take all
precautions necessary and to remove yourself from the audit if you feel your
presence would call into question the integrity of the firm.
Bibliography
Cohn, G. (2014). economics. Retrieved from Brooklyn College of the City of New York:
http://www.academic.brooklyn.cuny.edu
Schumerhorn, J. (2012, May 12). Business. Retrieved from Examiner.com:
http://www.examiner.com
Spiceland, J. D., Sepe, J. F., & Nelson, M. W. (2013). Intermediate Accounting 7th Edition.
New York, NY: McGraw-Hill/Irwin.
