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Auditor Code of Professional Ethics. Audit

Introduction

The object of the work is the system of ethics of auditors.

The subject of the study is the activity of the system of codes of ethics for professional accountants and auditors.

The purpose of the work is to study the professional ethics of professional accountants and auditors from the Russian and foreign points of view.

Analysis of the topics of the Codes of Ethics for professional accountants and auditors is quite relevant and is of scientific and practical interest.

The profession of a professional accountant is a public interest profession, which implies the recognition and acceptance of a duty to act in the public interest. In relation to the professional accounting community, the public includes clients, employers, employees, professional associations of accountants, the financial community, and others who rely on the objectivity, independence, and integrity of professional accountants to ensure the orderly conduct of business. Therefore, the responsibility of a professional accountant is not limited to meeting the needs of an individual client or employer. When acting in the public interest, a professional accountant must comply with and comply with the requirements of the Code of Ethics for Professional Accountants and Auditors.

Norms of behavior of accountants. For the first time, the provisions of professional accounting ethics were developed in the USA in 1987. The American Association of Accountants adopted a code of ethics for accountants, which is updated from time to time. Its main provisions:

1) an accountant, before taking a place, must carefully study the work of the predecessor;

2) if the predecessor is no longer working, he should be contacted with a written request;

3) if it follows from the preliminary acquaintance with the cases that the employer violates or may violate the current legislation, the accountant must refuse the offer (work);

4) the accountant has no right to demand from the administration knowledge and understanding of what he is doing;

5) an accountant cannot himself demand a promotion;

6) the employer's profits cannot include a share for the chief accountant, i.e. an accountant cannot receive a bonus or additional payment for financial results that he himself has deduced;

7) the accountant should not advise the employer how to commit and hide the traces of his crime;

8) the employer and the accountant are jointly and severally liable for the misrepresentation of reporting;

9) an accountant is obliged to regularly improve his professional qualifications, etc. It is believed that the presence of a code strengthens the status of an accountant and increases the demand from employers for his work.

Auditing has become a prominent phenomenon in modern economic life. Qualified auditors are relatively highly paid professionals. The auditor bases his activity on the trust of clients and users of financial statements. The organization selects and invites a qualified, objective auditor who enjoys the trust of shareholders and all other persons interested in accounting information. A number of mandatory requirements and restrictions in the activities of the auditor is determined in legislative acts. They constitute the legal foundations of the audit profession.

The community of auditors and their organizations, united by the Audit Chamber of Russia, is called upon to improve auditing in the country, to cultivate high moral qualities in auditors and consultants, to strictly monitor the observance by auditors of not only legal, but also ethical standards of professional and human behavior.

1 The origin of professional ethics

To find out the origin of professional ethics is to trace the relationship of moral requirements with the division of social labor and the emergence of a profession. Aristotle, then Comte, Durkheim paid attention to these questions many years ago. They talked about the relationship between the division of social labor and the moral principles of society. For the first time the materialistic substantiation of these problems was given by K. Marx and F. Engels.

The emergence of the first professional and ethical codes refers to the period of the division of labor in the conditions of the formation of medieval workshops in the 11th-12th centuries. It was then that for the first time they state the presence in the shop charters of a number of moral requirements in relation to the profession, the nature of work, and partners in work.

However, a number of professions that are of vital importance for all members of society arose in ancient times, and therefore, such professional and ethical codes as the Hippocratic Oath, the moral regulations of priests who performed judicial functions, are known much earlier.

The appearance of professional ethics in time preceded the creation of scientific ethical teachings, theories about it. Everyday experience, the need to regulate the relationship of people of a particular profession led to the realization and formalization of certain requirements of professional ethics. Professional ethics, having arisen as a manifestation of everyday moral consciousness, then developed on the basis of a generalized practice of the behavior of representatives of each professional group. These generalizations were contained both in written and unwritten codes of conduct and in the form of theoretical conclusions. Thus, this indicates a transition from ordinary consciousness to theoretical consciousness in the sphere of professional morality. Public opinion plays an important role in the formation and assimilation of the norms of professional ethics. The norms of professional morality do not immediately become universally recognized, this is sometimes associated with a struggle of opinions. The relationship between professional ethics and public consciousness also exists in the form of tradition. Different types of professional ethics have their own traditions, which indicates the continuity of the basic ethical standards developed by representatives of a particular profession over the centuries. Professionalism as a moral personality trait.

1.1 Professionalism as a moral personality trait

Professional ethics is a set of moral norms that determine a person's attitude to his professional duty.

The moral relations of people in the labor sphere are regulated by professional ethics. Society can function normally and develop only as a result of a continuous process of production of material and valuables.

Professional ethics studies:

relations between labor collectives and each specialist individually;

moral qualities, the personality of a specialist, which provide

the best performance of professional duty;

relationships within professional teams, and those

specific moral standards inherent in this profession;

features of professional education.

Professionalism and attitude to work are important characteristics of the moral character of a person. They are of paramount importance in the personal characteristics of the individual, but at various stages of historical development, their content and assessment varied significantly. In a class society, they were determined by the social inequality of the types of labor, the opposite of mental and physical labor, the presence of privileged and unprivileged professions. The class character of morality in the sphere of work is evidenced by a work written in the first third of the 2nd century BC. the Christian biblical book "The Wisdom of Jesus, the son of Sirach", in which there is a lesson on how to treat a slave: "feed, stick and burden - for the donkey; bread, punishment and work - for the slave. Keep the slave busy and you will have peace loosen his hands and he will seek freedom. In ancient Greece, physical labor in terms of value and significance was at the lowest rating. And in a feudal society, religion considered labor as a punishment for original sin, and paradise was presented as eternal life without labor.

The situations in which people find themselves in the process of performing their professional tasks have a strong influence on the formation of professional ethics. In the process of labor, certain moral relations develop between people. They have a number of elements inherent in all types of professional ethics.

First, it is the attitude to social labor, to the participants in the labor process.

Secondly, these are the moral relations that arise in the area of direct contact between the interests of professional groups with each other and with society.

Professional ethics is not a consequence of inequality in the degree of morality of various professional groups. It's just that society shows increased moral requirements for certain types of professional activity. Basically, these are such professional areas in which the labor process itself requires the coordination of actions of all its participants. Particular attention is paid to the moral qualities of workers in the field that are associated with the right to dispose of people's lives, here we are talking not only about the level of morality, but first of all about the proper performance of their professional duties. The labor activity of people in these professions, more than any other, is not amenable to preliminary regulation, does not fit within the framework of official instructions. It is inherently creative. The peculiarities of the work of these professional groups complicate moral relations and a new element is added to them: interaction with people - objects of activity. This is where moral responsibility becomes crucial. Society considers the moral qualities of an employee as one of the leading elements of his professional suitability. General moral norms should be specified in the labor activity of a person, taking into account the specifics of his profession.

Thus, professional morality should be considered in unity with the generally accepted system of morality. Violation of the work ethic is accompanied by the destruction of general moral principles, and vice versa. The irresponsible attitude of an employee to professional duties poses a danger to others, harms society, and can ultimately lead to the degradation of the individual himself.

In modern society, the personal qualities of an individual begin with his business characteristics, attitude to work, level of professional suitability. All this determines the exceptional relevance of the issues that make up the content of professional ethics. Genuine professionalism is based on such moral norms as duty, honesty, exactingness towards oneself and one's colleagues, responsibility for the results of one's work.

2 From audit history

The profession of an independent accountant-auditor arose in the 19th century. in joint stock companies in Europe. This was due to the need for an objective assessment of the reporting of a joint-stock company, obtaining reliable data on the financial position of the enterprise. These objective data could only be given by a specialist independent of the firm. It can be noted that accountants-auditors appeared in Great Britain in the middle of the 19th century, where the law on mandatory audit was passed in 1862, in France - in 1867, in the USA - in 1937.

Until the beginning of the 20th century. an independent audit in the United States of America was based on the English model, which provides for detailed studies of balance sheet data. In this regard, R. Montgomery called the American audit of this early stage an "accounting audit", noting that three-quarters of the auditor's working time was spent on calculations and compiling accounting books. The first official regulation on auditing in the United States was published in 1917 and dealt with the "audit of balance sheets." This ruling was prepared by the American Institute of Certified Public Accountants (now the American Institute of Chartered Public Accountants - AICPA).

The standardization of auditing in the United States began in 1939, when the AICPA established the Audit Procedures Committee and it issued the Audit Procedure Regulations. Until 1972, 54 Regulations were issued by this Committee. The Committee then became the Auditing Standards Executive Committee (later renamed the Auditing Standards Board). The Board summarized all the Regulations and brought them together in the form of the Audit Procedure Regulation, which is currently in force.

In 1880 the Institute of Chartered Accountants in England and Wales was founded. One hundred years later, it already had 76,000 members. This institute does a lot of methodological work, develops accounting and auditing standards, publishes the journal Accountants, which publishes a variety of audit materials.

In Germany, the first attempt to introduce an audit was made in 1870, when an addition to the law on joint-stock companies obliged the supervisory boards of these companies to check the main reporting forms - the balance sheet and the profit distribution report - and report the results of the check at general meetings of shareholders.

The methodology for organizing an external audit was more clearly formulated in the regulations regarding joint-stock companies in 1931. In 1932, the Institute of Auditors was established in Germany, which existed until 1941. After the end of World War II, the Institute of Auditors was formed in Düsseldorf, which in 1954 was renamed at the German Institute of Auditors. It has gained high prestige and is essentially an all-German organization.

Currently, the Institute of Auditors includes more than 6,000 auditors and 700 audit organizations. The main condition for membership is voluntary but strict adherence to professional rules, including ethical standards.

State influence on audit activity in Germany is determined by the fact that all auditors and audit firms must be members of the Audit Chamber of Germany.

In France, there are two main organizations involved in auditing: the Chamber of Expert Accountants and the National Company of Accounts Commissioners. The main difference between accountants and account commissioners is that the former are invited to conduct audits of accounting and reporting in joint-stock companies, while the latter are appointed on a mandatory basis in accordance with the existing legislation on joint-stock companies. Accounts commissioners carry out the most responsible checks; the profession of an expert accountant is not so strictly regulated by government bodies.

In Italy, statutory audit activities may be carried out in accordance with the Government Decree of 1992 only by persons entered in a special nominal register, which is under the control of the Ministry of Justice. Only auditors who have passed exams in accounting, law, computer technology and informatics can get into this register. Applicants for the title of auditor can be specialists with higher economic, legal and commercial education with at least three years of practical experience.

In 1983, the Audit Administration was established in China and the first audit firms emerged, which have now reached a fairly high level of development.

Audit is becoming more and more widespread in the countries of the Commonwealth of Independent States (CIS). Belarus, Kazakhstan, Russia, Uzbekistan and Ukraine have adopted laws on auditing. In the CIS, the process of attestation of auditors and the issuance of licenses has been established, both for audit firms and for auditors working as entrepreneurs.

In Russia, audit activity and the profession of an auditor in their modern form appeared relatively recently in connection with the economic transformations in the country. Meanwhile, as noted by a well-known specialist in the field of audit, control and revision, prof. Yu.A. Danilevsky, attempts to create an audit institution in Russia were made in 1889, 1912 and 1928, but they all ended in failure. The fourth attempt, undertaken in the late 80s of the last century, proved to be the most successful, as practice has shown.

2.1 Formation and development of audit in Russia

The first stage (1987-1993) was characterized, on the one hand, by the directive nature of the creation of audit organizations (1987 - the creation of the first audit organization "Interaudit"), on the other hand, by the spontaneous nature of the emergence of audit activity (training, disorderly issuance of the first certificates and licenses during the period 1990-1993).

The second stage (December 1993 before the adoption of the Federal Law "On Auditing" - August 2001) - the period of formation of the Russian audit, in the process of which the Provisional Rules for Auditing, approved by Decree of the President of the Russian Federation of December 22, 1993 No. 2263, Decree of the Government of the Russian Federation dated May 6, 1996 No. 482 “On Approval of Normative Documents on the Regulation of Auditing Activities” and a number of other documents.

The work on attestation of auditors and licensing of audit activities was started and carried out, audit public associations and audit firms were created, work began on conducting mandatory audits and providing audit-related services.

For the period 1994-2001. The Central Attestation and Licensing Audit Commission (CALAC) of the Ministry of Finance of the Russian Federation issued 23,600 licenses to licensees (including 14,700 audit organizations and 8,900 individual auditors). The number of valid licenses was about 8,900, including 7,700 for general audit, 266 for audit of investment institutions, audit of insurers. During the same period, the CALAC of the Ministry of Finance of the Russian Federation approved almost 36,500 auditor qualification certificates for issuance. The number of valid qualification certificates was 249,001.

For the period 1996-2000. 37 auditing rules (standards) and one auditing methodology were developed and approved by the Audit Commission under the President of the Russian Federation, which formed the methodological basis of the Russian audit.

The third stage of audit activity in Russia began after the adoption of the Federal Law "On Auditing" (dated August 7, 2001 No. 119-FZ as amended by Federal Law dated December 14, 2001 No. 164-FZ). The adoption of the Federal Law confirmed the final formation of audit in Russia, made it possible to adopt a number of legal acts to regulate audit activities in Russia, to take a step towards integrating Russian audit into the international audit system.

2.2 Auditor integrity

The ethics of the auditor is a system of norms of moral behavior of the auditor, the audit organization during the audit, the provision of services related to the audit. Such a concept as medical ethics has long been known, and the functions of an auditor can be compared with the functions of a doctor, only the object of the beneficial influence of the auditor is not a person, but an enterprise (organization).

In October 1996, the Presidium of the Audit Chamber of Russia approved the Code

professional ethics of auditors united by the chamber. It is approved by the general

The Code of Professional Ethics for Auditors first appeared in Russian history. The very procedure of its application is unique and unusual. Auditors undertake to voluntarily and in good faith observe the established standards of professional conduct. Therefore, they must not only be known, but also understood. The Code specifies the following ethical standards:

Generally accepted moral norms and principles

public interest

Objectivity and attentiveness of the auditor

Auditor Competence

Client Confidential Information

Tax relations

Professional service fee

Relationships between auditors

Employee relations with the audit firm

Auditor inconsistent actions

Audit services in other states

I consider it appropriate to comment on certain norms contained in the Code.

The Code of Ethics for Auditors summarizes the ethical standards of professional behavior of independent auditors, defines the moral, moral values that the audit community affirms in its environment, ready to protect them from all possible violations and encroachments. Compliance with universal and professional ethical standards is an indispensable duty and the highest duty of every auditor, manager and employee of an audit firm.

The Code of Ethics contains the following requirements.

Auditors are obliged to adhere to universal moral rules and moral norms in their actions and decisions, to live and work according to their conscience; observe the rules of the norm of general morality, truthfulness and honesty in actions and decisions, independence and objectivity in judgments and conclusions, intransigence to injustice.

Compliance with the public interest.

The external auditor is obliged to act in the interests of society and all users of financial statements, and not just the customer. Defending the interests of the client in the tax, judicial and other authorities, as well as in his relationship with other legal entities and individuals, the auditor must be convinced that the protected interests arose on legal and fair grounds. As soon as the auditor becomes aware that the protected interests of the client arose in violation of the law or justice, he is obliged to refuse protection.

auditor objectivity.

Auditors should not present facts knowingly inaccurate or biased.

When providing any professional services, auditors are required to objectively consider all emerging situations and real facts, not to allow personal bias, prejudice or outside pressure to affect the objectivity of their judgments.

The auditor should avoid relationships with persons that could affect the objectivity of his judgments and conclusions, or immediately terminate them, indicating the inadmissibility of pressure on the auditor in any form.

Auditor attention.

When performing professional services, maximum care should be taken. Auditors must be attentive and serious about their duties, comply with approved auditing standards, adequately plan and control work, and check subordinate specialists.

auditor independence.

Auditors are required to refuse to provide professional services if there are reasonable doubts about their independence from the client organization and its officers in all respects. In an opinion or other document drawn up as a result of the services rendered, the auditor must consciously declare his independence in relation to the client.

The main circumstances that may impair the independence of the auditor or give rise to doubts about his actual independence:

1) forthcoming (possible) or ongoing judicial (arbitration) cases with

client organization;

2) financial participation of the auditor in the affairs of the client's organization in any form;

3) financial and property dependence of the auditor on the client (for example,

joint participation in investments);

4) indirect financial participation (financial dependence) in the organization

client through relatives, employees of the company, through the main and subsidiaries, etc.;

5) family and friendly relations with directors and higher

management personnel of the client;

6) excessive hospitality of the client, as well as receiving goods from him and

services at prices significantly reduced relative to real market prices;

7) participation of the auditor (heads of audit firms) in any bodies

management of the client's organization, its main and subsidiaries;

audit firms) on financial investments in organizations in which they themselves have any financial interests;

9) the previous work of the auditor in the organization of the client or in the management

organizations in any positions;

10) proposals from the client to appoint an auditor to the management and other

position in the client's organization.

Under the above circumstances, independence is considered violated if they arose, continued to exist or were terminated in the period for which professional audit services are to be performed.

The main circumstances that may damage the independence of an audit firm or give rise to doubts about its actual independence:

1) if the audit organization participates in financial and industrial

a group, in a group of credit institutions or a holding and provides professional audit services to organizations included in this financial-industrial or banking group (holding);

2) if the audit organization arose on the basis of a structural unit

former or current ministry (committee) or with the direct or indirect participation of a former or current ministry (committee) and provides services to organizations previously or currently subordinate to this ministry (committee);

3) if the audit organization arose with direct or indirect participation

banks, insurance companies or investment institutions and provides services to organizations whose shares are owned, acquired or acquired by the above structures during the period for which the audit firm must provide services.

In cases where the auditor performs other services on behalf of the client (consulting, reporting, accounting, etc.), it is necessary to ensure that they do not violate the independence of the auditor. Auditor independence is ensured when:

1) auditor's advice does not develop into management services

organization;

2) there are no reasons and situations affecting the objectivity of the auditor's judgments;

3) personnel involved in accounting and compiling

reporting, is not involved in the audit of the client organization;

4) responsibility for the content of accounting and reporting

assumed by the client organization.

Professional competence of the auditor.

Auditors are required to provide a sufficient professional level of audit services required by the client.

Assuming an obligation to provide certain professional services, the auditor must be confident in his competence in this area, possess the necessary amount of knowledge and skills in order to conscientiously and professionally fulfill obligations, guarantee the client audit services based on modern techniques using all, including the latest, regulations.

The auditor is obliged to refrain from providing professional services that go beyond his competence, as well as those that do not correspond to his qualification certificate.

The audit firm can attract competent professionals to assist the auditor in solving specific tasks.

The professional competence of an auditor is based on general and specialized higher education, passing certification exams, confirmed by relevant diplomas and certificates, as well as on the experience of continuous practical work in providing professional audit services together with other specialists of this profile and professional level.

The auditor is obliged to constantly update his professional knowledge in the field of accounting, taxation, financial activities and civil law, organization and methods of auditing, legislation, Russian and international norms and standards of accounting and auditing.

To ensure the quality of professional services, the auditor must strictly follow Russian and international auditing standards.

Client confidential information.

The auditor is obliged to keep confidential information about the affairs of clients obtained in the provision of professional services without time limit and regardless of the continuation or termination of direct relations with them.

The auditor should not use confidential information of the client, which became known to him in the performance of professional services, for his own benefit or for the benefit of any third party, and also to the detriment of the client's interests.

Publication or other disclosure of clients' confidential information is not a violation of professional ethics in the following cases:

1) when it is done with the permission of the client, and also taking into account the interests of all

parties that may be affected:

2) when it is provided for by legislative acts or decisions

judiciary;

3) to protect the professional interests of auditors during the official

investigations or private proceedings conducted by managers or authorized representatives of clients;

4) when the client involved the auditor in actions contrary to

professional standards.

The auditor is responsible for maintaining confidential information by assistants and all personnel of the firm.

tax relations.

Auditors are required to strictly comply with tax laws in all aspects: they must not knowingly hide their income from taxation or otherwise violate tax laws for their own benefit or for the benefit of others.

When providing professional tax services, the auditor is guided by the interests of the client. At the same time, he is obliged to comply with tax laws and should not contribute to falsification in order to evade the client from paying taxes and deceive the tax service.

The auditor is obliged to inform the administration of the client and the audit commission of the joint-stock (economic) company about the facts of violation of tax legislation, errors in calculations and payment of taxes revealed during the statutory audit and warn them about the possible consequences and ways to correct violations and errors.

Recommendations and advice in the field of taxation, the auditor is obliged to provide the client only in writing. At the same time, he should not reassure the client that his recommendations exclude any problems with the tax authorities, and should also warn the client that the responsibility for the preparation and content of tax returns and other tax reporting lies with the client.

Professional service fee.

The auditor's professional fees are ethical if they are paid based on the scope and quality of the services provided. It may depend on the complexity of the services provided, qualifications, experience, professional authority and the degree of responsibility of the auditor.

The amount of professional fees for auditors should not depend on the achievement of any specific result or be determined by circumstances other than those specified above.

The auditor has no right to receive payment for professional services in cash in excess of the generally established norms of calculations. The auditor must refrain from paying or receiving commissions for acquiring or transferring clients or transferring third party services to anyone.

The auditor is obliged to agree in advance with the client and fix in writing the conditions and procedure for paying for his professional services. The auditor is not required to announce prices for services rendered in advance.

Doubts about the observance of professional ethics are caused by the situation when the payment of one client is all or most of the annual revenue of the auditor for the rendered professional services.

Relationships between auditors.

Auditors are required to treat other auditors kindly, to refrain from unreasonable criticism of their activities and other conscious actions that cause damage to colleagues.

The auditor should refrain from disloyal actions towards a colleague when the client replaces the auditor, assist the newly appointed auditor in obtaining information about the client and the reasons for replacing the auditor. Informing the newly appointed auditor is carried out in writing in compliance with the rules.

The newly invited auditor, if such an invitation is not based on the results of a tender held by the client, before agreeing to the proposal, must send a written request to the former auditor and make sure that there are no professional reasons for refusing it.

A newly invited auditor who has not received a response from the previous auditor to his request within a reasonable time and, despite the efforts made, who does not have other information about the circumstances that prevent him from working with this client, has the right to give a positive response to the proposal received.

The auditor has the right, in the interests of his client and with his consent, to invite other auditors and other specialists to provide professional services. Relations with other auditors (specialists) involved additionally must be businesslike and correct.

Auditors (specialists), additionally involved in the provision of services, are obliged to refrain from discussing with the client's representatives the business and professional qualities of the main auditors, to show maximum loyalty to the colleagues who invited them.

Relations of employees with the audit firm.

Certified auditors who have agreed to become employees of an audit firm are obliged to be loyal to it, contribute to the authority and further development of the firm with all their activities, maintain business, friendly relations with managers and other employees of the firm, managers and staff of clients.

The relationship between employees and the audit firm should be based on mutual responsibility for the performance of professional duties, on devotion and open-mindedness, continuous improvement of the organization of audit services, their professional content.

A certified auditor, who often changes auditing firms or suddenly leaves it and thereby causes some damage to the firm, violates professional ethics.

The heads (employees) of an audit firm refrain from discussing with third parties the professional and personal qualities of their former employees and colleagues, except in cases where these former employees have caused significant damage to the profession and the legitimate interests of the firm by their actions.

At the request of the head of the audit firm in which the auditor is employed, the head of the audit firm, of which the auditor previously worked, may give a written recommendation indicating the professional and personal qualities of the auditor.

The auditor, for one reason or another, leaving the audit firm, is obliged in good faith and in full to transfer to the firm all the documentation and other professional information he has.

3 Accountant ethics

The Code of Ethics contains the following requirements. A professional accountant is required to observe the following basic principles of conduct:

a) honesty;

b) objectivity;

c) professional competence and due diligence;

d) confidentiality;

e) professional behavior.

Honesty

1.2. A professional accountant must act openly and honestly in all professional and business relationships. The principle of honesty also implies fair dealing and truthfulness.

1.3. A professional accountant should not deal with records, documents, communications or other information if there is reason to believe that:

a) the information contains materially false or misleading statements;

b) the information contains statements or data prepared carelessly;

c) the information contains omissions or distortions of necessary data where they may be misleading.

1.4. A professional accountant will not be considered in breach of clause 1.3 if he issues a report adjusted for the reasons given in that clause.

Objectivity

1.5. A professional accountant should not allow bias, conflicts of interest or other persons to influence the objectivity of his professional judgment.

1.6. A professional accountant may find himself in a situation that could damage his objectivity. It is not possible to identify and describe all such situations. A professional accountant should avoid relationships that may distort or influence his or her professional judgment.

Professional competence and due diligence

1.7. A professional accountant must constantly maintain his knowledge and skills at a level that ensures the provision of qualified professional services to clients or employers, based on the latest achievements in practice and modern legislation. In providing professional services, a professional accountant must act with due diligence and in accordance with applicable technical and professional standards.

1.8. Qualified provision of a professional service involves the formation of an informed judgment regarding the application of professional knowledge and skills in the process of providing a service. Ensuring professional competence can be divided into two independent stages:

a) achieving the proper level of professional competence;

b) maintaining professional competence at the proper level.

1.9. Maintaining professional competence requires constant awareness of relevant technical, professional and business innovations. Continuing professional development develops and maintains the capabilities that enable a professional accountant to perform competently in a professional environment.

1.10. Diligence is understood as the obligation to act in accordance with the requirements of the task (contract), carefully, carefully and in a timely manner.

1.11. A professional accountant should take steps to ensure that those working under him in a professional capacity are properly trained and directed.

1.12. When appropriate, a professional accountant should make clients, employers or other users of professional services aware of the limitations of those services in order to avoid construing a professional accountant's opinion as a statement of fact.

Confidentiality

1.13. A professional accountant must maintain the confidentiality of information obtained as a result of professional or business relationships and must not disclose this information to unauthorized third parties, unless a professional accountant has a legal, professional right or obligation to disclose such information. Confidential information obtained as a result of a professional or business relationship should not be used by a professional accountant to obtain any advantage for them or third parties.

1.14. A professional accountant must maintain confidentiality even outside their professional environment. A professional accountant must be aware of the possibility of inadvertent disclosure of information, especially in the context of maintaining long-term relationships with business partners or their close relatives or family members.

1.15. A professional accountant must maintain the confidentiality of information disclosed to him by a potential client or employer.

1.16. A professional accountant must maintain the confidentiality of information within his or her organization or with employers.

1.17. A professional accountant should take all reasonable steps to ensure that those under his supervision and those from whom he receives advice or assistance respect his duty of confidentiality with due respect.

1.18. The need to respect the principle of confidentiality continues even after the end of the relationship between a professional accountant and a client or employer. When changing jobs or starting work with a new client, a professional accountant has the right to use previous experience. However, a professional accountant should not use or disclose confidential information obtained from a previous professional or business relationship.

1.19. A professional accountant should or may be required to disclose confidential information when:

a) the disclosure is legally permitted and/or authorized by the client or employer;

b) disclosure is required by law, for example:

when preparing documents or presenting evidence in a different form during the trial;

when reporting the facts of violation of the law that have become known to the appropriate state authorities;

c) disclosure is a professional duty or right (unless prohibited by law):

when checking the quality of work of an organization - a member of a professional organization or the professional organization itself;

upon inquiry or investigation by a member body, professional body or supervisory authority;

when a professional accountant defends his or her professional interests in legal proceedings.

1.20. In deciding whether to disclose confidential information, a professional accountant should consider the following:

a) whether the interests of any of the parties, including third parties whose interests may also be affected, will be harmed if the client or employer has permission to disclose information;

b) whether the information is sufficiently known and reasonably substantiated. In a situation where there are unsubstantiated facts, conclusions, incomplete information or unreasonable conclusions, professional judgment should be used to determine in what form information should be disclosed (if necessary);

c) the nature of the expected message and its addressee. In particular, a professional accountant must be satisfied that the persons to whom the communication is addressed are the intended recipients of the communication.

professional behaviour.

1.21. A professional accountant must comply with relevant laws and regulations and avoid any activity that discredits or may discredit the profession, or is an activity that a reasonable and knowledgeable third party with all the necessary information would consider to be detrimental to the good reputation of the profession.

1.22. In offering and promoting its candidacy and services, a professional accountant should not discredit the profession. A professional accountant must be honest and truthful and must not:

a) make claims about the quality of the services he can provide, his qualifications and experience gained;

b) make disparaging remarks about the work of other professional accountants or make unwarranted comparisons of their work with those of other accountants.

Conclusion

Accountants and auditors of public, charitable, non-profit organizations in their work are guided by ethical standards adopted in the independent sector as a whole.

1) devotion to the cause, the desire to fulfill the mission of the organization

2) voluntariness and disinterestedness

3) commitment to the public good

4) respect for the value and dignity of the individual

5) tolerance and striving for social justice

6) responsibility to society

7) openness and honesty

8) frugality in relation to means

9) compliance with laws.

Basic principles of everyday ethics:

1) Be a model of personal behavior

2) In the process of work, act in accordance with the values \u200b\u200band purpose of their profession

3) Serve your profession for the benefit of others

4) Do not participate in cases related to lies, deceit, forgery

5) Strive to improve their professional knowledge and practical experience, put the call of duty above all

6) Do not use professional relationships to achieve personal goals

7) Maintain the confidentiality of the information received

8) Direct efforts to prevent inhumane or discriminatory actions directed against one person or groups of people.

Professional organizations develop detailed codes of professional ethics for accountants and auditors, trying to provide for all possible nuances of their behavior.

The Code of Ethics for Accountants and Auditors summarizes the ethical norms of professional behavior, defines the moral, moral values that the community affirms in its environment, ready to protect them from all possible violations and encroachments.

Compliance with universal and professional ethical standards is an indispensable duty and the highest duty of every accountant and auditor, manager and employee of the company.

Much is said about the ethics of professional auditors, but little is done to educate authoritative highly qualified specialists. Ethical problems are encountered daily in the professional path of an accountant and auditor. They need to be resolved with dignity, and for this you need to know the norms of professional behavior, prepare yourself for their strict observance.

List of sources used

Code of Ethics for Members of the Institute of Professional Accountants of Russia

(approved by the decision of the Presidential Council of the IPBR, protocol No. 08/03 dated 26.09.07)

Code of Ethics for Russian Auditors (approved by the Audit

activities under the Ministry of Finance of Russia, protocol No. 56 dated May 31, 2007)

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Attitude to the target organization audience. Compose a message. Here..., A Beketov, F. Sarokvasha. 3.1. Questions ethics in the work of a public relations specialist ... the following: the main principle of professional ethics communications specialist...

Introduction

The first part of the essay talks about the ethics of the auditor. One of the most important tasks in the formation of the audit profession is the development of ethical standards that could guide Russian auditors in their activities. Initially unwritten, but strictly observed, these norms were later enshrined in the so-called ethical audit codes. The distinguishing feature of the audit profession is the recognition and acceptance of the responsibility to act in the public interest, i.e. their opinion on financial statements and accounting procedures should reflect the real state of affairs. Therefore, the auditor's responsibility is not limited to meeting the needs of an individual client or employer. Acting in the public interest, the auditor must comply with and obey the standards of professional ethics of the auditor.

The second question provides evidence that the auditor does not search for facts in the audit process that indicate the presence of distortions in the financial statements.

Auditor ethics

The need to write a code of ethics for auditors is due to the fact that representatives of the audit profession, conducting an audit of an organization, an individual entrepreneur, work not only for them, they are obliged to act primarily in the public interest. Violation of ethical standards entails censure, condemnation from colleagues, as well as specially created courts at the audit chambers. In more serious cases, offenders may be subject to severe penalties such as a large monetary fine and suspension from work, either temporarily or permanently.

The Code of Ethics adopted by the Audit Council under the Ministry of Finance of the Russian Federation on May 31, 2007 consists of nine sections:

1. Model of behavior of the auditor and the audit organization.
2. Conclusion of an agreement on the provision of professional services.
3. Conflict of interest.
4. Second opinion.
5. Fee and other types of remuneration.
6. Advertising and offering professional services.
7. Gifts and tokens.
8. Application of the principle of objectivity in all types of services.
9. Applying the principle of independence in assurance engagements.

The first section contains the main principles of professional ethics of auditors and guidance on their application, made in the form of a behavior model for the auditor and the audit organization. The application of the behavior model allows you to identify threats of violation of the basic principles, assess their severity and, if necessary, take precautions.

In the Code of Ethics for Auditors of Russia, as fundamental principles that auditors should be guided by in order to achieve their professional goals, are included:

Independence of judgments and opinions of auditors - is ensured by the fact that he is not in the public service, is not a full-time employee of any non-audit organizations and therefore must fulfill his duties, i.e. carry out audit activities. Auditors, in addition, should not be materially interested in the activities of the audited enterprise, in other words, neither they nor their close relatives can be owners, shareholders or shareholders of the audited enterprises;

Objectivity and honesty - as the inadmissibility of prejudices, biases, conflicts of interest, and other factors when forming an opinion on financial statements; professional competence and due diligence, means that the auditor provides professional services with due diligence, competence diligence, his duties include maintaining professional knowledge and skills at a high level at all times so that the audited organizations or employers can enjoy the benefits of competent professional services based on on the latest developments in practice, legislation and technology;

The Code of Ethics also mentions confidentiality. The auditor must maintain the confidentiality of information obtained in the course of providing professional services, and should not use or disclose such information without appropriate and specific authority, unless disclosure of such information is dictated by his professional or legal rights or obligations;

The professional conduct of the auditor must be such as to maintain the good reputation of the profession - the auditor must refrain from any conduct that might discredit it. The auditor must be honest, truthful and must not:

- make statements that exaggerate the level of services he can provide, his qualifications and the experience he has acquired;
- give disparaging reviews of the work of other auditors or make unreasonable comparisons of their work with the work of other auditors.

It is necessary to note such an ethical norm as the auditor's awareness of responsibility for the consequences of his recommendations and conclusions based on the results of audits. The Law “On Auditing Activities in the Russian Federation” specifies the sanctions that can be applied to an auditor for a poor-quality audit and an unfair opinion.

The following sections outline patterns of behavior in specific situations, including precautions against threats to violate the fundamental principles, and examples of situations where it is not possible to take sufficient precautions against threats.

The Code provides for a number of mandatory procedures for the auditor to comply with ethical requirements in the course of concluding a contract for the provision of professional services. These procedures are related to the determination of the acceptability of the client and the occurrence of conditions leading to a change in the contract. Before entering into a relationship with a new client, the auditor should consider whether the choice of this client could give rise to threats to compliance with the fundamental principles. If the client has questionable characteristics, i.e. he, for example, is involved in illegal activities, or has a reputation as a dishonest counterparty, or practices dubious preparation of financial statements, then the auditor faces threats to comply with ethical principles during the performance of the contract. If the identified threats are clearly immaterial, the auditor should consider and, as necessary, take precautionary measures to eliminate them or reduce them to an acceptable level. Precautions include:

- a correct understanding of the nature of the client's activities, the complexity of the operations performed by him, the specific requirements of the assignment, the purpose, nature and scope of the work to be performed;
— knowledge of the relevant industry or subject matter;
- having experience under relevant legal or reporting requirements, or having acquired such experience;
- attracting a sufficient number of employees with the necessary qualifications;
- using the work of experts as needed;
- an agreement on the actual deadline for completing the task;
- compliance with the rules and procedures of quality control.

If the auditor finds that he can apply appropriate safeguards to the identified threats, he proceeds to the engagement process. If threats cannot be reduced to an acceptable level, then the auditor should refuse to enter into a relationship with the client.

The Code of Ethics considers a conflict of interest as a result of the activities or interests of the auditor himself, which are the subject of a conflict with this client, or as a result of the provision of services by the auditor to a third party in respect of which, in the opinion of the client, he has a conflict of interest. The auditor is required to take reasonable steps to identify circumstances in which a conflict of interest may arise, as these circumstances may give rise to a threat of violation of the fundamental principles. If, in the auditor's assessment, these threats are not clearly insignificant, the auditor is required to take appropriate precautions to eliminate such threats or reduce them to an acceptable level.

The Code lists these precautions. This notice:

- the client about business interests or activities that may present a conflict of interest;
- all related parties that the auditor provides services to two or more parties relating to a subject matter that causes a conflict of interest of these parties;
- the client that the auditor, when providing the requested services, works for many clients (for example, in a specific market sector or for a specific type of assignment).

In each case, the auditor should seek the consent of the client (all parties) to act in such circumstances. If consent is obtained, the auditor may also apply a number of safeguards, such as:

- use of separate independent groups responsible for the task;
- application of procedures that prevent access to information (for example, strict physical isolation of groups from each other, confidentiality and secure storage of information);
- having clear instructions for team members on security and privacy issues;
- use of warnings on compliance with confidentiality rules signed by employees and heads of the audit organization.

An auditor who does not obtain, in response to his request, the consent of the client to work for a third party in respect of which signs of a conflict of interest are identified should refuse to continue work for one of the parties.

Where there is a conflict of interest in the course of threat detection, there may be situations where threats of violation of one or more fundamental principles (for example, the principles of objectivity, confidentiality and professional conduct) are simultaneously created, which cannot be eliminated or reduced to an acceptable level by using safeguards. In this case, the auditor is required to make a determination that the engagement cannot be accepted or that one or more conflicting engagements need to be discontinued.

The Code considers the ethical requirements for an auditor in a situation where a company that is not a client applies to him with a request to express a second opinion on the application of the rules (standards) of accounting, auditing, financial statements, etc. in particular circumstances or in relation to particular operations of that company.

In this case, the auditor has threats of violation of ethical principles, and he must evaluate the significance of such threats. If the identified threats are clearly immaterial, the auditor should consider and, as necessary, take safeguards to eliminate them or reduce them to an acceptable level. The Code provides for the following precautions:

- a request to the client for permission to communicate with the auditor serving him;
- limitations inherent in any opinion expressed when communicating with this client;
- providing a copy (in writing) of his opinion to the auditor serving this client.

An auditor who is denied permission by a company requesting a second opinion to communicate with its auditor should, after weighing all the circumstances, decide whether a second opinion is appropriate.

Section 5 of the Code provides that, in negotiating professional services, the auditor may charge any fee that he considers appropriate for his services. If one auditor charges a fee lower than others, this is not considered unethical. From the appointed fee, there may be a threat of violation of the basic principles. The severity of the threats depends on factors such as the level of the fee charged and the services to which the fee is applied. Given these threats, precautions must be considered and, if necessary, taken to eliminate the threats or reduce them to an acceptable level. Such measures can be:

- familiarization of the client with the terms of the assignment and, in particular, with the methodology for calculating payment and the volume of services provided;
- allocating adequate time and qualified personnel to complete the task.

The Code states that when the auditor seeks new orders for the provision of his services through advertising and other methods of working in the market, there may be threats of violation of the basic principles. When offering and promoting their services on the market, the auditor should not discredit the profession. The auditor must be honest and truthful and must not:

- make statements that exaggerate the level of service he can provide, his qualifications or the experience he has acquired;
- give disparaging reviews of the work of other auditors or make unreasonable comparisons of their work with the work of other auditors.

When in doubt about the proposed form of advertising or market practices, the auditor should consult with the appropriate body of the self-regulatory organization of auditors.

The Code of Ethics establishes the criterion that the auditor should use when determining the significance of threats of violation of the basic principles that arise when the client offers the auditor and members of his family gifts and other signs of attention. If a reasonable and well-informed third party can find such gifts to be clearly insignificant, the auditor may consider that such an offer is made in the course of a normal business relationship and does not contain a specific intention to influence the auditor's judgment or obtain any information from him. In such cases, the auditor may consider that there is no significant threat of violation of fundamental principles.

In all cases where this criterion is not met, the auditor should take precautionary measures. And if it turned out to be impossible to eliminate the threat or reduce it to an acceptable level, the auditor should not accept the gift or courtesy offered to him.

The Code addresses the threats of violating the principle of objectivity in the provision of professional services. It is stated that the threats that arise will depend on the particular circumstances of the engagement and the nature of the work performed by the auditor.

The auditor is required to assess the severity of such threats and, if they are not clearly minor, to consider and, as necessary, take appropriate safeguards to eliminate the threats or reduce them to an acceptable level. These measures include:

- exclusion of the person in respect of whom there is a threat from the group performing the task;
- implementation of procedures for supervision over the implementation of the audit engagement;
- termination of financial or business relationships that cause a threat;
- discussing problems with senior management of the audit organization;
- discussion of problems with authorized persons of the client.

Section 9 of the Code articulates a conceptual approach to the independence of the auditor during the performance of various engagements, which assumes that “when considering accepting or continuing the engagement, as well as the required precautions or the presence of a particular employee as a member of the audit team. The firm must evaluate all the surrounding circumstances, the nature of the engagement, and the threats to independence.” In evaluating threats to independence and appropriate precautions in assessing the significance of a particular threat, both quantitative and qualitative factors should be taken into account. An issue is clearly immaterial if it can be considered minor and without consequences. In assessing the materiality of any threats to independence and the safeguards required to reduce them to an acceptable level, the public interest must be taken into account.

The Code states the requirement that members of the review team and employees of the audit organization must be independent of the client during the entire period of the engagement.

Application of the principle of independence in long-term relationships with the audit client and the provision of services to him outside the audit. An audit of individuals and legal entities cannot be carried out by audit organizations and individual auditors who provided these persons with services for the restoration and maintenance of accounting records, as well as for the preparation of financial statements, during the three years immediately preceding the audit. The application of the requirements of the Code with regard to the independence of an auditor who provided services to a client in the period preceding the conclusion of the contract should take into account the norms of the current legislation of the Russian Federation regarding the admissibility of providing certain related services, especially when identifying threats to independence and considering possible precautionary measures in relation to these threats.

If the firm becomes an audit client during or after the period covered by the audited financial statements, then the audit firm should consider the possibility of threats to independence due to:

- financial or business relations with the audit client during or after the period covered by the financial statements, but before the audit firm accepts the audit engagements;
- services previously provided to the audit client.

When verifying the reliability of information that is not an audit of financial statements, the audit firm should consider whether financial or business relationships or prior services may create a threat to independence. Special attention is drawn to the case of consideration of threats to independence arising from the provision of services to the audit client that are not related to the audit, which cannot be provided during the period of the audit engagement. If such services were provided during or after the period covered by the accounts being audited, but before the commencement of the audit-related services, the auditor is required to consider the possibility of a threat to independence resulting from the provision of such services.

If, according to the assessment, such a threat is not clearly insignificant, then it is necessary to provide for and, as necessary, take appropriate precautions:

— discuss issues of independence related to the provision of non-audit services with the client's representatives with managerial authority, such as the audit committee;
- obtain confirmation from the client that he accepts responsibility for the results of services that are not audits:
- not allow employees who provided services that are not an audit to participate in the audit of financial statements;
— engage another audit firm to recheck the results of non-audit services or to re-perform those services to the extent that it can accept responsibility for them.

The Code separately considers a number of features of the application of the principle of independence for listed companies. Firstly, if the client for the audit of financial statements is a listed company, the audit organization and its subsidiaries must take into account the interests and relations with the audit client's related companies. Second, there should be ongoing communication between the audit firm and the audit committee (or other governing body) of the listed company to review relationships and issues that the firm believes can reasonably be considered to have an impact on independence. Thirdly, when auditing the financial statements of a listed company, the audit organization must inform the client orally or in writing once a year about all relations and issues arising between the audit organization, its subsidiary and the client, which, in the professional judgment of the audit organization, can reasonably be attributed factors that affect independence. The matters to be reported vary depending on the circumstances; the decision to report them should be made by the audit organization itself (4).

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Auditor Code of Professional Ethics. Audit

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Introduction

Auditor ethics

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