Ethics and Conduct in the Accounting and Auditing Profession
The accounting and auditing profession is underpinned by a variety of ethical standards and behaviors. Below is an outline of these crucial ethical principles:
Integrity
Integrity is a fundamental component of the accounting profession. It necessitates that accountants maintain honesty and transparency when dealing with clients’ financial information. This includes refraining from personal gain or advantages derived from clients’ confidential information, as well as avoiding alterations or manipulations to financial data.
Auditors are also required to perform their professional duties in accordance with applicable laws and regulations. They must adhere to high professional standards, such as honesty and transparency, in all aspects of their work and relationships, whether personal or with employees of the entities under their oversight. The conduct of auditors must be beyond reproach to maintain public trust.
Objectivity and Independence
Objectivity and independence are essential ethical values in the fields of accounting and auditing. Accountants must remain free from conflicts of interest and questionable business relationships while providing accounting services. A lack of objectivity and independence may hinder an accountant’s ability to deliver an honest assessment of a company’s financial information.
The quality of audit work heavily relies on objectivity, as audit results cannot reflect accurate realities if the auditing processes are biased or influenced by personal interests.
Professional Competence and Due Care
Due care is an ethical value that requires accountants to adhere to all technical and ethical accounting standards. It demands that accountants demonstrate competence, diligence, and a correct understanding of financial information.
The competence of an individual is often determined by their level of education and experience. Therefore, due care may necessitate that seasoned accountants supervise and properly guide less experienced accountants in their professional duties.
Auditors are also expected to conduct themselves in a professional manner at all times, following high professional standards during their work to ensure they can fulfill their obligations effectively and impartially. They should not undertake tasks for which they are not qualified.
Auditors must comply with existing auditing and financial accounting standards, policies, and procedures, and should have a comprehensive understanding of the principles, constitutional, legal, and institutional standards governing the operations of the entities they oversee.
Professional Development
Auditors are required to commit to developing and enhancing their skills to fulfill their professional responsibilities adequately. They should exercise caution when conducting, supervising, and preparing financial reports during audits.
Auditors must apply the highest quality methods and practices in their auditing operations, as well as adhere to accepted auditing standards when carrying out audits and issuing reports. Additionally, accountants must comply with relevant laws and regulations while avoiding any actions that could tarnish the profession’s reputation.
Confidentiality
Accountants and auditors are obligated not to disclose any confidential professional or business information, nor use it for personal benefit unless they have explicit permission to do so, or a legal, professional, or ethical obligation that compels them to disclose such information. In certain instances, withholding information may be contrary to public interest.