Textbook Notes (367,787)
Canada (161,400)
Accounting (248)
ACCT 3280 (18)
Hiscock (4)
Chapter 4

Chapter 4 - Professional Ethics and Auditor Responsibilities.docx

11 Pages
196 Views
Unlock Document

Department
Accounting
Course
ACCT 3280
Professor
Hiscock
Semester
Winter

Description
Chapter 4Professional Ethics and Auditor ResponsibilitiesMoral responsibilitiessummarized as public accountants should be upright not kept uprightProfessional responsibilitiesrefer to the more formal ethical responsibilities of auditors rules and principles for the proper conduct of an auditor General EthicsEthical behaviour in auditing or in any other activity is no more than a special application of the general notion of ethical conduct devised by philosophers for men generallyEthical conduct in auditing draws its justification and basic nature from the general theory of ethics thus we are well advised to give some attention to the ideas and reasoning of some of the great philosophersKey elements of ethics 1 Involves questions requiring reflective choice decision problems 2 Involves guides of right and wrong moral principles 3 Concerned with the consequences of the decisionAccountants and auditorsare also spectators observing the decisions of colleagues advisers counselling coworkers instructors teaching accounting students or new employees on the job judges serving on disciplinary committees of provincial associations and critics commenting on the ethical decisions of others Philosophical Principles in EthicsLet conscience be your guideappealing rule because it calls on an individuals own judgement which may be based on wisdom insight or adherence to custom or an authoritative codeMonistic theoriesassume that universal principles apply regardless of the specific factsPluralistic theoriesassume that there are no universal principles and that the best approach is to use the principles that are most relevant in the caseDeontological dutybasedKantian ethics assumes that there are universal principles imperatives such as the biblical Ten Commandments that must always be followed regardless of the consequences Kant maintained that motive and duty alone define a moral act not the consequences of the act o Some object to the imperative principle as socalled universal rules always turn out to have exceptions according to the specific situations o Another major problem with dutybased ethics is that duties can conflictOne then needs to sort out which duty is most important depending on the specific contextProfessional rules for accountants are greatly based on dutybased Kantian ethics and can be viewed as dutiesUtilitarianismindicates that when we have a choice we pick the one that results in the best outcome that is the highest utilityConsequentialism aim to achieve the greatest good for the greatest number of peopleThese monistic theories are not sufficient on their own to handle complexities of reallife sitationsExclusive reliance on one principle can pose a problem o Eg before SOX firms relied on costbenefit and auditing was seen as a loss leader in creating more lucrative consulting practices The resulting increase in consulting revenues was so large that the appearance of independence was affectedArthur Andersons demise o Passage of SOXfocus on quality control and puts emphasis on auditors duties toward public interestMoral imaginationconsequences of a decision for others and the ability to imagine others feelings about these must be a part of ethical reasoningCritical Thinking Frameworkis one that consists of principles concepts and their application and ethics is an important concept within this framework Goal you want to do the right thing or learn the truth 1 Learn the views of others on the situation contextual factors accountability relationships conflicts of interest 2 Identify the claims at issue ie the controversies 3 Explain the reasons for the competing claims the need to understand others perspectives 4 Evaluate the argument supporting the claim ie assess the reasons assumptions evidence and their relationship to the claim consider the logic rhetoric as well as the plausibility of the reasons which persuade you that a claim is true 5 Reach a conclusion about the claim that is most likely to be true this will be the basis for an action or decision Sound reasoning o There must be a link between reasons and a conclusion and on an audit engagement we want that link to be strong
More Less

Related notes for ACCT 3280

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit