Question

- why is it so important for auditors to maintain high ethical standards?

- describe independence, and why is it so relevant for auditors?

-describe the issue of recording time, and why not recording time may be against company policy?

-Explain the code of professional conduct and give examples.

Answer 1

An ethical culture is the foundation of effective internal controls. Every auditor knows that internal controls are best practice and necessary to ensure compliance with applicable laws and regulations, and to ensure that there is a system of checks and balances to detect inappropriate transactions. Yet, without a culture of ethics and compliance, people will find ways to circumvent internal controls, policies, and procedures.

Ethical Standards are often established by professional organizations to help guide members in performing their job functions according to sound and consistent ethical principles.

Auditor independence refers to the independence of the external auditor. It is characterised by integrity and an objective approach to the audit process. The concept requires the auditor to carry out his or her work freely and in an objective manner.

The auditor should be independent from the client company, so that the audit opinion will not be influenced by any relationship between them. The auditors are expected to give an unbiased and honest professional opinion on the financial statements to the shareholders.

When an audit begins, you or your auditor decide how much and what is being audited. In simple form, this means either an audit of all of your record management procedures or a sample. Auditing all of your procedures may be extremely time consuming; however, in some cases, especially if there's a question of liability, it may be the only practical approach to the audit. If you're simply confirming compliance or conducting an internal check, the audit focuses on a sample of procedures.

Every company establish some policies regarding every thing. That is a standard protocol for the companies. Company also establish policies of recording time. Which auditor will accept and treat is as suitable environment.

Integrity is the core value of a Code of Ethics. Auditors have a duty to adhere to high standards of behavior (e.g. honesty and candidness) in the course of their work and in their relationships whether it be personal or with the staff of audited entities.

The Code of Professional Conduct was adopted by the membership to provide guidance and rules to all members--those in public practice, in industry, in government, and in education--in the performance of their professional responsibilities.

Compliance with the Code of Professional Conduct, as with all standards in an open society, depends primarily on members' understanding and voluntary actions, secondarily on reinforcement by peers and public opinion, and ultimately on disciplinary proceedings, when necessary, against members who fail to comply with the Rules.

Integrity, Independence, Objectivity, Professional Compliance and due care, confidentiality and professional behavior are the examples of professional conduct.