Read the following article.

The Auditor´s Ethical Environment.

A trademark of professionals is their willingness to accept a set of professional and ethical principles in the
conduct of their daily affairs. The acceptance of these principles requires that professionals maintain a higher
standard of conduct than is called for by law. Professionals are required to consider carefully the implications
of alternative actions and to conduct themselves in a manner that is not only lawful but proper.

Professional Ethics
A partial definition of ethics as found in the American Heritage Dictionary follows: “The study of the general
nature of morals and of the specific moral choices to be made by the individual in his relationship with others.”
The choices we make determine our ethical values and the image we project to others. It is a true test of our
integrity.

The operative question is how to translate this desire to be ethical into our daily lives (and specifically for the
accounting professional, how to translate this desire into business affairs).

First, personal ethical standards require an ethical commitment on our part, that is, a personal resolve to act
ethically. Next, we must have an ethical awareness, an ability to perceive the ethical implications of a
situation (e.g. the acceptance of a small gift form an audit client involves ethical considerations).

But it may be the need for ethical competency that creates our largest hurdle. To make the right choices, we
must possess the ability to engage in sound moral reasoning and to develop practical problem-solving
strategies.

Here is a model that could be used by a CPA (Certified Public Accountant) or anyone who faces critical
ethical questions in their work:

1. Gather or identify all the relevant facts about the situation that raises the ethical issue and creates the
need for an ethical decision.

2. Consider the individuals or groups that will be affected (the stakeholders).The questionable business
activities may affect management, the CPA, the stockholders, and society as a whole.

3. Consider the alternative courses of action. (e.g., do nothing, try to convince the client of the
advisability of including the disclosure in the financial statements, resign from the engagement).

4. Consider them possible results or consequences of each course of action . (e.g., lose the client but
enhance your reputation for integrity and “feel better” about your sense of ethics).

5. Compare the courses of action with the standards for ethical question(s) raised the code of conduct of
your profession, your own moral principles that evolve from your training and life´s experiences).

6. Select a course of action from among the alternatives.

 Exercise 1: The Auditor´s Ethical Environment.

1)According with the American Heritage Dictionary a definition of ETHICS is

___________________________________________________________________________
___________________________________________________________________________.

2)The three personal ethical standards are: ______________________________

____________________________________ and ___________________________________.

3) Give an example of each personal ethical standard.

a) _________________________________________________________________________.

b) _________________________________________________________________________.

c) _________________________________________________________________________.

4) Give five tips for the CPAs(Certified Public Accountant) or anyone who faces ethical questions in their work:

__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________

5) In a brief way, what is Ethics for you in Spanish?

__________________________________________________________________________________________

Exercise 2 Find the words in the extract and put them in the correct order. You have the first letter.

Word Meaning
1.- lcaieth ___e____________________ __________________________

2.- ssgwlliinge ___w___________________ _________________________

3.- emomitmntc ___c____________________ _________________________

4.- sswaareen ___a_____________________ _________________________

5.- competency ___c______________________ _________________________

6.- hdstkolersco ___s _____________________ _________________________

Exercise 3: Find the meaning in English of each word in a dictionary and write it in your notebook .

1.
2.
3.
4,
5.
6.