Auditing and Assurance Services Essay

Introduction

Auditing and accounting are based on ethical and moral rules of the profession and are subjected to principles of honesty, fairness, and objectivity. The auditing organization should follow strict codes of ethics and moral principles to meet organizational principles and business needs. Their codes of ethics are usually based on moral and social responsibility issues, fair treatment of customers and colleagues (Buchholz and Rosenthal, 1998).

Auditing and Assurance Responsibilities

The main problem is that individual and corporate clients served by auditing professionals will have no choice but to rely upon their lawyers for expert advice. On the other hand, the renewed responsibility of auditors demands that they report fraud and financial problems caused by false financial statements and inadequate accounting principles. This norm is important for modern business organizations as they try to hide their revenues and illegally reduce the tax burden. In this situation, auditing professionals should assume to have a command of a complicated and changing subject matter; that is why they have been hired. But this also means that individual and corporate clients are rarely able to evaluate the professional’s competence (Beauchamp and Bowie, 2003).

The need to report fraud and other discrepancies is a need for auditors and the state. These strict accounting and auditing norms will help the government to prevent fraudulent practices of business organizations. Professionals are assumed to have a command of a complicated and changing subject matter; that is why they have been hired. But this also means that clients are rarely able to evaluate the professional’s competence. In any event, the professional expert is expected to serve the client’s and not his own (or his firm’s) best interests. Public confidence is based upon this foundation of trust (Boatright, 1997). Codes, and their enforcement, play a strong role in maintaining such public confidence. Auditing services have a special reason to desire public support of their endeavors: businesses whose financial statements are audited pay for the auditing services (Gay and Simnett, 2007).

The proposed principles of responsibility and auditor’s duties will ensure objective and fair auditing procedures. Those who receive and rely upon published financial information must be confident of the independence of the professionals who conducted the audit. The new codes of auditing standards come at a time when business, in general, is feeling pressure to have a code of ethics. Most auditing employees work in the business environment and those who do not interface with it. They therefore might find themselves confronted with two codes that could even be contradictory. Many auditing services will bristle at the notion of laypersons regulating the profession. There is a not-so-subtle warning in statements such as these; the proper response to criticism is to ascertain any truth in the criticism. Where fault is found, correct it. To ignore this advice is to risk the specter of having outsiders do it for the profession, perhaps in a heavy-handed way. A public organization is finding itself increasingly in the glare of publicity surrounding several issues of professional responsibility (Donaldson et al 2002). Despite efforts at developing certification procedures and codes of ethics, those not in public practice have faced skepticism about their claims to professionalism (De George, 19990. The primary problem is that the National Association of auditing services employees and the Institute of Internal Auditors have precious few recourses available to enforce their codes of professional ethics. Moreover, the certificates they issue are not required for the practice of the profession. Many have questioned whether the necessary elements for professionalism are even present in these groups (Carroll and Gannon, 1997).

Conclusion

In sum, the struggle for professional recognition for auditing services employees in either the managerial sphere or in internal auditing still has a long way to go. On the other hand, the struggle in the public sphere will be one of protecting the profession’s already well-established professional reputation. The most prominently publicized are the responsibility of detecting fraud and the appropriateness of auditing the same firm for whom one has provided auditing services. Auditing employees are also being asked to re-examine their perspective of who receives their service.

Bibliography

1. Beauchamp, T., and Bowie, N. (eds). 2003, Ethical Theory and Business, 7th edn, Upper Saddle River, NJ: Prentice Hall.
2. Boatright, J. 1997, Ethics and the Conduct of Business, 2nd edn, Upper Saddle River, NJ: Prentice Hall.
3. Buchholz, R. and Rosenthal, S. 1998, Business Ethics, Upper Saddle River, NJ: Prentice Hall.
4. Carroll, S. and Gannon, M. 1997, Ethical Dimensions of International Management, Thousand Oaks, CA: Sage.
5. De George, R. 1999, Business Ethics, 5th edn, Englewood Cliffs, NJ: Prentice Hall.
6. Donaldson, T., et al. 2002, Ethical Issues in Business, 7th edn, Upper Saddle River, NJ: Prentice Hall.
7. Gay G. & Simnett R.2007, Auditing and assurance services in Australia. 3rd Edition (revised). Mcgraw Hill