International auditing and ethics

The aim of this paper is to develop an ethical analysis to emphasize the importance of appropriate ethical decision making during the audit process. Protest from outraged consumers may force companies manufacturing in India or Thailand to sack the underage children they were previously employing as machinists.

By collecting this kind of information a company is in fact keeping some records on the social impact of its actions and policies and therefore we might consider this social accounting. Where in the past unethical behaviour by a company might have been kept quiet by skilled public relations people, there is now greater likelihood that someone within a company will alert the relevant pressure group loyalty to employers being lessened, and concern for the public good being greater and that the pressure group will succeed in generating significant publicity about the incident.

It is of utmost importance to consider this carefully because one will get different theories depending on the purpose. So, internal ethical assessment is also concerned with internal audits. But problems tend to multiply when differing value bases are permitted to take hold within different cultures.

In these circumstances, should those involved seek to disguise the limitations of their work, thereby risking the displeasure of their superiors and hazarding their career prospects, or should they just do what they can, perhaps in the dim awareness that their superiors might prefer not to be informed of weaknesses in the process that they are not themselves in a position to remedy.

If the purpose is to serve society, you get one kind of ethics; but if the purpose is to perform a duty, one has another kind of ethics. Since the promulgation of the Standards, internal auditors worldwide have had the opportunity to standardise internal audit practice.

Confidentiality Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.

Feedback is absolutely necessary for a company that wants to promote organisational learning and the results of the ethical audit exercise including the findings from the internal audits should also be reported to all employees, simply because this is the right thing to do.

In the move to total quality, suppliers become key stakeholders. Furthermore, if a company wants to establish relationships with its stakeholders based on trust, stakeholders need to know the values that a company has committed itself to, in order to have confidence in what future actions the organisation will take.

By using focus groups, stakeholders can then provide important feedback, which automatically sets the audit results in a wider context.

Codes of ethics are important since they implicitly set limits for unethical behaviour and are intended to offer guidance in ambiguous situations. It describes the minimum requirements for conduct, and behavioral expectations rather than specific activities. Code of Ethics — Principles Internal auditors are expected to apply and uphold the following principles: It requires knowledge of moral principles, and skills in applying them to problems and decisions.

In the internal ethical assessment process the prevailing values of employees are examined through interviews, surveys, questionnaires etc.

Code of Ethics

New Code highlights include: Ethically, things may seem relativelystraightforward at the level of the individual auditors engaged in the practice of auditing. Dialogue with stakeholders is carried out in the external ethical assessment process and in this process the interests of stakeholders are identified and balanced according to the weight the company assigns to each stakeholder group.

Consumer Perception of Ethics Consumer power is increasingly being having an affect on company behaviour.

It is possible and justified to assign different weights to the interests of different stakeholder groups. Integrity The integrity of internal auditors establishes trust and thus provides the basis for reliance on their judgment.

Since corporate ethical behaviour depends on the ethical behaviour of individuals, looking at the people in the organisation is essential for instilling organisational values. Get the latest news delivered to your inbox. This requires openness about values and consistency between them.

Among the concepts that have been used — apart from Corporate Social Responsibility — are sustainable development, corporate citizenship, sustainableentrepreneurship, the triple bottom line and business ethics 11 Even supposing the adequacy of such categorisations of virtues 10putting these virtues into practice is not a simple matter.

Many ethical problems for multinationals and companies trading far from their home base arise because of differing value systems: In part these values are connected with public opinion on matters such as respect, justice and responsibility and can, to some extent, be derived from the rights and interests of stakeholders, but the bottom-line is that the organisation must formulate its own set of basic values.

Identifying organisational values - both proclaimed and actual - will assist a company to ensure that all its actions are commensurate with these values, and enable it to put in place a robust structure to support the operationalisation of the values.

Clear guidance for accountants in public practice that relevant PAIB provisions are applicable to them; New guidance to emphasize the importance of understanding facts and circumstances when exercising professional judgment; and New guidance to explain how compliance with the fundamental principles supports the exercise of professional skepticism in an audit or other assurance engagements.

Beyond the new structure, the Code brings together key ethics advances over the past four years, and is clearer about how accountants should deal with ethics and independence issues. An ethical framework is a set of norms and principles that serves as guidance for individual actions. An audit report is a factual document.The International Auditing and Assurance Standards Board sets high-quality international standards for auditing, assurance, and quality control that strengthen public confidence in the global profession.

The International Auditing and Assurance Standards Board (IAASB) develops ISAs and International Standards on Review Engagements (ISREs), which deal with the audit and review of historical financial statements, and International Standards on Assurance.

Jan 10,  · A significant number of jurisdictions have either directly adopted or use the International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants.


The International Accounting Education Standards Board establishes standards, in the area of professional accounting education, that prescribe technical competence and professional skills, values, ethics, and attitudes. The International Ethics Standards Board for Accountants ® (IESBA ®) today released a completely rewritten Code of Ethics for Professional Accountants that is easier to navigate, use and enforce.

Beyond the new structure, the Code brings together key ethics advances over the past four years, and. The International Auditing and Assurance Standards Board is an independent standard-setting body that serves the public interest by setting high-quality international standards for auditing, assurance, and other related areas.

International auditing and ethics
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