Accounting Information Systems: The Processes and Controls, 2nd Edition

ETHICAL ISSUES RELATED TO AUDITING (STUDY OBJECTIVE 12)

All types of auditors must follow guidelines promoting ethical conduct. For financial statement auditors, the PCAOB/AICPA has established a Code of Professional Conduct, commonly called its code of ethics. This code of ethics is made up of two sections, the principles and the rules. The principles are the foundation for the honorable behavior expected of CPAs while performing professional duties, whereas the rules provide more detailed guidance. Following are the six principles of the code:

1. Responsibilities. In carrying out their professional duties, CPAs should exercise sensitive professional and moral judgments in all their activities.
2. The Public Interest. CPAs should act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.
3. Integrity. To maintain and broaden public confidence, CPAs should perform their professional duties with the highest sense of integrity.
4. Objectivity and Independence. CPAs should maintain objectivity and be free of conflicts of interest in the performance of their professional duties. CPAs in public practice should be independent in fact and appearance when providing auditing and other attestation services.
5. Due Care. CPAs should observe the profession's technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of their ability.
6. Scope and Nature ...