Ethics Management Auditing and Developing

Question: Discuss about the Ethics Management for Auditing and Developing. Answer: Introduction A profession is a particular field of specialization in which as a person is adequately trained and experienced to perform functions in this field of study with expertise. An expert performs duties in the field that they have been trained on. To become an accountant, one has to fulfill certain academic, ethical and legal requirements before they are allowed to practice as an accountant (Arens, 2010). Before practicing accounting, it is a requirement that a person must have fulfilled certain academic qualifications to join an accountant training institution There are many ethical requirements in the auditing profession. This report identifies and analyzes an ethical issue that is common in the accounting profession. The report also analyzes past literature and research that has been done on the subject and identifies gaps that need further research to be done. Critical review of what it means to be an accountant Auditing is the independent process of accessing and investigating the final financial statements presented to the shareholders at the annual AGM to verify if the information submitted is true, accurate and represents the genuine and fair financial value of the business or organization in question. There are two types of auditors I.e., internal auditors, and external auditors. The internal auditor is appointed by the shareholders of the organization (Gul Fung, 2014). They have several functions and roles that they perform in an organization. The duties of internal auditors include establishing an internal control system that responds accurately to the needs of the organization, advising the management on various aspect of accounting, determining the relevant accounting methods for an organization depending on its characteristics, reviewing of an organization's internal financial controls and assessing the companys financial risk position (Kretzschmar, (2012). The internal auditors a re answerable to the shareholders and are required to be independent. The external auditors are a statutory requirement for all companies in Australia. All companies must have an external auditor whose responsibility is to investigate the financial report of an organization to make sure they reflect the genuine and fair value of the group. Auditors are required by law to be independent even though sometimes their integrity is compromised by the management of the organizations they audit. This can be very dangerous because an auditor whose integrity is compromised may collaborate with the management of the organization to infringe on the rights of shareholders (Kretzschmar, 2012). The auditing profession has a code of ethics that is followed by all auditors internationally. Auditors are governed by a set of rules and regulations that are able to guide them in their professional practice. The code of ethics for auditors is developed by The Institute of Internal Auditors, Australia (IIAA). Another body that develops the code of conduct for auditors is the Charted Institute of Internal Auditors. In Australia, there is a government body that also set ethical standards of auditors. The Auditing and Assurance Standards Board established under section 336 of the Corporations Act 2001 sets standards and controls quality in the auditing profession (Moller, 2013). Some of the basic ethics for the auditing profession include the following principles; The integrity of auditors establishes trust between the auditor and the client and therefore provides reliance on the judgment made by the auditor. The auditors should be able to do their work without the influence of any forces whether personal needs, internal or external forces. Objectivity. This principle require auditors to exhibit the highest level of objectivity in gathering, analyzing, evaluating and communicating information obtained during the auditing process. Auditors should make an assessment based on all the available information before coming up with a judgment. Another important principle of ethics in auditing is the principle of confidentiality. Auditors should be discrete with the information they obtain from a client during the audit process. The auditor can only share the information when required by law to do so. The ethic principle of competence is also very crucial for auditors. This involves proper application of skills, knowledge and experience in auditing work. This will be the subject of research in this report since an analysis of secondary sources of information reveals very gaps in the competence principle that needs further research. Ethics are very important in the auditing profession. There are various rules and code of conduct guidelines that have been put in place by professional bodies to help control the behavior of auditors (Campbell, 2005). This ethics helps in preserving the image and dignity of the profession. The values also help to protect the rights of clients to prevent them from being abused by auditors. This report analyzes the gaps that exist in ethics in the auditing profession so as to carry out further research to determine how these gaps can be filled. Background of the issue and justification The question of competence in the auditing profession is very crucial in making sure that the accounting information presented to the shareholders and other stakeholders of an organization are accurate and correct. Competence, therefore, is a very basic principle of accounting. The lack of competence even when all the other principles of accounting are met means that the financial reports and records cannot be relied upon by any of the stakeholders (Campbell Houghton,2005). Over the past few years, the issue of competence of shareholders has been arising with many organizations filing complaints about regulatory bodies on issues of competence realized among auditors. Having auditors who are competent in performing their tasks helps in boosting the confidence of the shareholders as well as other stakeholders of the organization. Due to this reason, it is, therefore, important to investigate the importance of competence among auditors and how competence can be enhanced among auditors. A lot of literature has been written on the issues of ethics among auditors and accountants. These issues have been addressed in both books and peer-reviewed journals. In auditing, competence is a very important principle in the ethics of the accounting profession. It is a fundamental principle because auditing is a very sensitive occupation and due to this reason the activities carried out by the auditors have a huge effect on the organization itself and even the stakeholders(Botica Redmayne, 2011). The key to achieving competence in auditing lies in using and adhering to all the international standards of accounting and auditing. This helps the auditor to reduce errors that arise during the verification process and therefore provide high-quality services to the client. According to Pickett (2013), incompetence by auditors can be caused by among other factors lack of proper training for auditors. This means that the auditor may not have been trained well or that they lack experience in real work environment despite being well trained and qualified. Kretzschmar,(2012) argues that many auditors become incompetent because of pure ignorance and lack of due care when going about their auditing work. According to Moller(2013), the issue of incompetence of auditors can be resolved and reduced through improving the level of training of accounts and organizing professional seminars to train and remind auditors of the importance of competence in auditing. Auditors should put a lot of emphasis on following the principles and standards of accounting and be careful in the judgment they make so as to ensure the accounting principle of competence is met(Gay, Simnett, n.d.)The gaps on the research topic are the role of professional bodies in ensuring adherence to the auditing principles and guidelines. The research methodology to be used in this project proposal will include a collection of both secondary and primary data. Interviews will be conducted with members of the acc ounting profession as well as officials of the regulatory bodies. Structured questionnaires will also be used to carry out this research. The secondary sources of information to be utilized in this research includes books and peer-reviewed journals that have been written in the past concerning this subject. The data analysis methods that will be employed in this study will be determined by whether the data collected in quantitative or qualitative. Secondary information will be collected from professional bodies and associations. Data obtained will be analyzed using various methods such as observation and comparison with past trends. The researcher will come up with a scale of measuring data to help in the analysis. The plan for conducting this study will be as presented in the Gantt chart below. Conclusion Ethics are crucial in any profession or field of specialization. Ethics help in governing the behavior of individuals within an organization and give guidelines on how people should go about their professional work. In accounting, ethics are critical. This profession deals with finance, and therefore, it is very vital for people in this business to adhere to the code of ethics. There are various professional bodies some national and others international that register accountants and auditors. These bodies help in regulating the accounting profession and make sure that the laid down procedures are followed. 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