Role of Professional Ethics in Conducting an Audit
Discussion Topic 1:
For this discussion:
Examine the role of professional ethics in conducting an audit.
Select an ethical dilemma that may arise during an audit and discuss how you would resolve it.
Discussion Topic 2:
Jane, of Jane’s Air Conditioning Service, decided that this year was the year to "take over" the air conditioning business in her town. Beginning in January, she started advertising her business, even though there was snow on the ground. Jane bought a supply of Freon, updated her vehicles, and bought new uniforms for her service technicians who make house calls. Now, Jane comes to you to determine how to optimize her deductions in order to reduce her tax liability.
What advice would you give her as to the expenditures above (assuming they all took place in the same year)? Be sure to explain what may (or may not) be capitalized and/or deducted.
Discussion Topics
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Discussion Topics
Discussion Topic 1
Professional ethics are fundamental when conducting an audit because they maintain the reputation and credibility of auditors. They allow auditors to maintain their independence, especially in performing their work according to the existing standards of practice (American Institute of Certified Public Accountants (AICPA), 2019). Audits require competency and high-quality work, which can only be assured through professional ethics. In addition, auditors serve in the broader interest of the public, and professional ethics ensure they maintain objectivity and integrity while conducting an audit (AICPA, 2019). It ensures their conduct is above any suspicion from the public.
An ethical dilemma that may arise during an audit is a firm’s non-compliance with financial reporting regulations. Auditors are required to obtain sufficient assurance that the firm is complying with laws. I would respond to this by reporting the non-compliance to the management. However, if I discover the man...