Group Discussion Board 1 - Reply
Jacob Mitchell
ACCT 301-B03
Liberty University
Dr. Felicia Olagbemi
May 19, 2014
In this weeks group discussion board, Michael does a great job explaining how an
auditor’s ethics can be challenged while performing an audit. He describes that these
ethical challenges arise from the high level of pressure placed on the auditor to complete
the audit so that the company being audited will benefit the most from the audit and that
the results of the audit with be based on the results that the company wanted (Auditor
Independence, 1998). Also, Michael explained that due to limited oversight and
inadequate legal help, auditors were left with two tasks: keep the client happy to ensure
continued business and provide a well-defined, concise, and accurate audit that would
ensure the accuracy of the company’s accounting department. In many cases the task of
keeping the client happy took priority over completing an accurate audit. This led to
numerous ethical dilemmas for the auditors and to make matters worse, the auditor’s jobs
were threatened if the company lost business due to negative audits. These threats of job
loss fueled the ethical failures on the part of many auditors.
Michael goes on to describe that the ethical challenges faced by auditors have
dramatically changed due the Sarbanes-Oxley Act and the current SEC rules regarding
auditing. Also, auditing has since become an independent service that is provided to a
company by an outside firm that is hired by an audit committee and not by the company
management. Due to these changes, auditors now have the ability to feel little pressure to
modify or manipulate the results found during an audit, which leads to more ethical
audits.
