You are on page 1of 4

Business Ethics

Spring 2010

Ethics in Auditing: The Auditing Function – Duska and Duska The main role of the independent auditor

The virtues of integrity and honesty

Trust What would happen “if everybody misrepresented the financial health of their company when it was to their advantage to lie”?

Liars want a double standard

The Auditor’s Responsibility to the Public What are the differences between an auditor and, for example, an attorney when it comes to the relationship to the paying client?

The Root of Conflicts of Interest

The Auditor’s Basic Responsibilities Financial statements – “presented fairly in accordance with generally accepted accounting principles”

According to Duska and Duska, what is the relationship between „fair presentation‟ and GAAP?

The evaluation of internal auditing control and Enron

Determining the acceptability of the level of independence risk 3. Considering benefits and costs 4. condition for independence”? 4 activities necessary to evaluate auditor independence: 1. but not a sufficient. or can reasonably be expected to compromise. Assessing the level of independence risk 2.Business Ethics Spring 2010 Reporting Errors and the Duty of Confidentiality Independence Total independence – Independence in fact and independence in appearance Auditor independence – “freedom from those pressures and other factors that compromise. and auditor’s ability to make unbiased audit decisions” Why do Duska and Duska claim that “Compliance with the rules is a necessary. Considering interested parties’ views in addressing auditor independence issues Conclusion Do you agree with Duska and Duska‟s claims about the responsibilities of the independent auditor? .

and auditing as low profit What is „opinion shopping‟ and why did it begin to create conflicts of interests in auditing? The Pressures on Labor Inputs Competitive prices. the merging of accounting firms.Business Ethics Spring 2010 The Structural Origins of Conflicts of Interest in the Accounting Profession – Colin Boyd Conflicts of interest in large audit firms The Modern Evolution of Public Accounting Firms The rise of national organizations. and Labor as the main cost of auditing Increased employment of junior auditors. and auditors being employed by audit clients What conflicts of interest were created by the practice of auditors being hired by the firms‟ audit clients? The Strategy of Horizontal Integration The benefits of a low cost audit – paving the way for high cost consulting services Conflicts of Interest between Auditing and Consulting What conflicts of interest were created from the sale of consulting services to audit clients? . Reducing costs.

but not eliminating. conflicts of interest The Future Evolution of the Profession Why is Boyd skeptical that the accounting profession is capable of self-regulation? .Business Ethics Spring 2010 The Power and Influence of the Big Five The power of the Big Five and conflicts of interest within the accounting institutions The power of the Big Five and conflicts of interest within the political system Will the Sarbanes-Oxley Act Work? Reducing.