Auditor Independence Auditors provide independent third-party opinion on the financial statements of a company. The independence of these auditors must be safeguarded during each engagement. The reliability and validity of an opinion rely on the independence of the auditor. There are times when the independence of the auditor is interfered with by malicious parties to safeguard with their own interests. Auditor independence can be referred to as the lack of hidden agendas and personal interests among parties that may affect the auditor’s objectivity (Thibodeau, Ramsay, Louwers, Sinason & Strawser, 2015).
Throughout the period of the audit, assignation PCAOB describes professional skepticism as a general duty of care that needs to be applied by the examiner. Professional skepticism is when someone has a questioning mind that involves a critical assessment and analyzes of audit evidence. It is primordial for an auditor to exercise professional skepticism when conducting the audit of financial statements. In other words, an auditor must refer to quality and credible reference. The auditor needs to question every aspect of the data presented or words that management is feeding them in order to achieve reasonable assurance about the conclusiveness of evidence.
Before Markham reveals his estimate of the underfunding risk the previous values showed he should first seek the advice of his firm, to explain his situation of how his estimated pension values were significantly higher than the actuaries reported value, and then voice any concerns he had that was related to the liability risk associated with his estimated higher values of the pension fund which is a misleading to the pension board members. Markham gave his oath to the Code of Ethics and Standards of Profession Conduct and should adhere to the rules and regulations and not provide false information or mislead his clients under any circumstances (Code of Ethics and Standards of Professional Conduct,
I find it difficult to believe that the managers were not aware of the reoccurring fraudulent activities. A bank’s work environment is highly commensurate with that of a sales environment. Banks often have sales objectives aimed at credit cards, lines of credits, mortgages, and more. Therefore, with my experience working in the sales industry, I imagine that there are unattainable sales goals that are set and managers create pressure onto the employees to hit unrealistic sales goals. The agency problem plays a significant role since managers know that if their branch hit their sales goals it looks good to upper management, thus creating job security with the company.
Understanding Financial Crisis: Causes, Effect and Prevent measure To most ordinary people, Financial Crisis is a both familiar and unfamiliar topic. There is a range of definition of the Financial Crisis, but in general it is refers to the crisis of financial assets or financial markets or financial institutions. In fact, Financial Crisis is closely related to people’s life, 2007-2008 Global Financial Crisis attracted ordinary people to focus on the financial sector. This essay will argue the financial crisis of 2008 came from the US subprime crisis, which has brought enormous impact on the world economy, and in different societies, the countries have different prevent measures to cope with the crisis. For the aspect of cause, the US subprime
Whether professional standards should be principles-based rather than rules-based is an unresolved issue. The general belief is that, by relying on bright-line and quantifiable evidence, rules-based standards often provides a vehicle for circumventing the intention of the standard (SEC, 2003). However, others have argued that, by relying on auditors' professional judgment, principles-based standards require auditors to be competent and independent. For example, Robert Herz, former chairman of the Financial Accounting Standards Board (FASB), has cited the recent events in the U.S. as evidence that preparers and auditors cannot be trusted to properly exercise professional judgment with objectivity and courage" (Herz, 2003). Furthermore, principles-based
Congruency: this virtue refers to the importance of promoting ethical behaviors and discrediting unethical behaviors Feasibility: this refers to the risk of unethical behavior occurring due to insufficiency of information, equipment, time or budget needed to fulfill the task Supportability: according to this virtue employees who feel that they are taken seriously will behave ethically. Firms need to keep their employees motivated in order to implement the ethical standards Transparency: this virtue refers to the level of transparency within the organization processes. In organizations having high transparency levels employees tend to adopt ethical values and correct any misbehavior Discussability: refers to the raising and discussion of unethical issues by the employees Sanctionability: firms can reward ethical behaviors and punish any unethical acts to build a more effective ethical culture within the
An environment that practices ethical leadership, must have written codes of ethics on which an organization’s culture get to develop. Ethical compliances are also involved in the development of corporate social responsibility. Recommendations Although L’Oreal is ranked as one of the top ethical organization, there is always a placed to improvement. Here are some recommendations for the company that can improve the ethical leadership practice in the company.
INTRODUCTION A widely used definition is: "A conflict of interest is a set of circumstances that creates a risk that professional judgement or actions regarding a primary interest will be unduly influenced by a secondary interest." Primary interest refers to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public office. Secondary interest includes not only financial gain but also such motives as the desire for professional advancement and the wish to do favours for family and friends, but conflict of interest rules usually focus on financial relationships because they are relatively more objective, fungible, and quantifiable.
Absenteeism is actually a very critical factor associated with labor productivity. Every organization attaches great importance to the need for absentia management. The absence of emergency or illness is inevitable in any organization, but it should be a very fair, compassionate and understanding way. Absenteeism is the cost factor that will affect the company and cost less.
A financial audit is an independent, objective evaluation of an organization 's financial reports and financial reporting processes. The primary purpose for financial audits is to give stakeholders reasonable assurance that financial statements are accurate and complete. Most internal audits are not adding value. One reason is that “ongoing compliance burdens and pressure to do more with less” is contributing to the decline in perceived internal audit value.