Discuss Professional Ethics in auditing

A member of a profession owes duty to the public including the employer, the profession itself
and to other members of the profession. Professional ethics are rules of conduct that govern the
behavior of an accountant. In Kenya, they are issued by institute of Certified Public Accountants
of Kenya (ICPA K) in form of statements and explanatory notes. A professional accountant
should act in a manner consisted with the good reputation of the occupation and refrain from any
conduct which might bring discredit to the profession. The following are fundamental principles
stated by ICPAK to ensure auditors are credible people before they give credibility to financial
statements.
1. Integrity: A member should be straight forward, honest and sincere in his approach to
professional work. A member must be aware of his role in the society and maintain high
standards of conduct should not satisfy what he knows as untrue as true and should
take caution not to mislead intentionally or unintentionally.
2. Professional independence: This is a fundamental concept to the accounting profession
as a whole. It is essentially an attitude of mind characterized by objectivity and integrity. A
member in public practice should be and should appear to be free in every professional
assignment he undertakes, of any interest which might distract him from being objective.
He must be impartial and must not allow prejudice or bias to affect his judgment. A
member not in practice may be unable to be or seen to be free of any interest which
might conflict to the proper approach of his professional work. However, this does not
diminish his duty of objectivity in relation to that work.
3. Confidentiality: The guide to professional ethics states that information acquired in the
course of professional work should not be disclosed except where consent has been acquired from the client, where there’s public duty to disclose or where there is legal or
professional duty to disclose such information. A member acquiring information in the
course of professional work should neither use nor appear to use that information in
his personal or third party advantages e.g. if a member is auditing a limited company
and he realizes that the company has made a substantial increase in profits, it would
be unethical to advise a friend to buy the shares of this company in anticipation of the
expected increase in the share prices as a result of increase in profitability.
4. Technical competence: A member has duty to carry out his professional work with care
and skill and in conformity with the professional ethical standards issued by ICPA K
and by the laws of Kenya. A member should not undertake or continue professional
work which he himself is not competent to perform unless he obtains such advice and
assistance as will enable him to perform such work. To be competent a member should
be fully conversant with accounting, book keeping, auditing, financial management,
information technology, receivership, liquidation and bankruptcy law, taxation both
personal and corporate and must be aware of the economic environment within which
his clients operate. To be competent, he must also possess sound judgment. This is in
professional as well as economic issues. He should be a good communicator.

---

Wilfykil answered the question on April 11, 2019 at 09:03