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Professional Ethics and Auditor Responsibilities

This chapter began with considerations of moral philosophy, explained the provincial Rules of Professional Conduct and ended with the agencies and organizations that enforce the rules governing PAs' behaviour.

Professional ethics for PAs is not simply a matter covered by a few rules in a formal Rule of Professional Conduct. Concepts of proper professional conduct permeate all areas of practice. Ethics and its accompanying disciplinary potential are the foundation for PAs' self-regulatory efforts.

Your knowledge of philosophical principles in ethics will help you make decisions about the provincial Rules of Professional Conduct. This structured approach to thoughtful decisions is important not only when you are employed in public accounting but also when you work in government, industry and education. The ethics rules may appear to be restrictive, but they are intended for the benefit of the public as well as for the discipline of PAs.

PAs must be careful in all areas of practice. Regulators' views on ethics rules may differ in several aspects from the provincial institute views. As an accountant, you must not lose sight of the nonaccountants' perspective. No matter how complex or technical a decision may be, a simplified view of it always tends to cut away the details of special technical issues to get directly to the heart of the matter. A sense of professionalism coupled with a sensitivity to the impact of decisions on other people is invaluable in the practice of accounting and auditing.

Finally, it should be noted that there is a strong link between codes of conduct and GAAS. In fact, codes of conduct can be viewed as a means of fulfilling auditor responsibilities for GAAS and assurance standards. For example, the first GAAS standard, which relates to the personal attributes of the auditor (see Chapter 2), closely corresponds to the ethical principles of integrity, objectivity, independence, professional competence and due care discussed previously. The dominance of ethical issues over accounting or auditing techniques is increasingly being recognized throughout the profession. Most audit failures appear to be attributable to poor professional judgement, at least in hindsight, that arise from improper consideration of conflicts of interest on various disclosure and measurement issues.

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