In an effort to carry out the large-scale task related to the development and subsequent implementation of interconnected and coordinated rules of professional ethics for auditors, today the Audit Council at the Ministry of Finance of the Russian Federation with the participation of professional audit organizations accredited by the Ministry of Finance has developed a special Code of Ethics. He was received on August 28, 2003.
Code of Ethics
The Code of Professional Ethics of Auditors should be understood as an official detailed list of principles and values that guide Russian specialists in the implementation of professional activities. According to the code, the main goal of the profession of an auditor is to work at the highest possible professional level, which ensures high-quality execution of tasks, as well as satisfaction of public interests.
It is worth noting that compliance with the professional ethics of auditors (accountants) is achieved primarily by a high degree of responsibility of specialists in this field. Compliance with professional and universal ethical standards should be considered an indispensable duty and the main duty of any auditor, director and employee of the audit company.
What principles should the auditor comply with?
Consider the principles of professional ethics of the auditor. It is worth noting that the fundamental rules by which each specialist should be guided are given in this Code in force in Russia. It is advisable to include independence, honesty, official thoroughness and professional competence, objectivity, and confidentiality. In addition, any official who respects the rules of professional ethics of the auditor should be guided by regulatory documentation.
Honesty and Objectivity
We will analyze the main of the presented categories in more detail. Thus, by the honesty referred to in the Code of Ethics for Professional Accountants and Auditors, it is necessary to understand the truthfulness, reliability and absolute impartiality. According to the principle of objectivity, all specialists must carry out professional activities fairly, without conflict of interest.
In the process of performing their functions, employees of audit organizations should be objective. It is understood as impartiality, impartiality and non-responsiveness to one or another impact when studying professional aspects and forming conclusions and conclusions.
Subject to the professional ethics of the auditor in terms of objectivity, it is advisable:
- to avoid relations that allow partiality, bias or the influence of other persons to the detriment of directly objectivity;
- not to offer or accept hospitality and gifts, if it is possible to reasonably assume that they significantly and unacceptably affect the judgments of auditors in the professional field.
Professional competency
The professional ethics and independence of auditors is one of the most important rules of their activity. When agreeing to the provision of services, the specialist must be absolutely sure that he will perform the work at a high professional level. The professional ethics of the auditor assumes that he should refrain from rendering services in that area in which he is incompetent. Of course, if the appropriate specialists do not help him. Professionals should provide audit plan services with due attention, diligence and competence. Their duty is considered to be constant concern regarding the replenishment of their own experience and knowledge, and at a level that can give both the client and management confidence in the highest quality of the provision of professional services, which is based on continuously updated information in the field of legislation, practice and audit procedures.
The Code of Professional Ethics of Russian auditors under professional competence refers to the possession of a certain amount of skills and knowledge that allows the auditor to provide professional services in a high-quality and qualified manner. It is important to add that specialists do not have the right to exaggerate their own knowledge and experience.
Confidentiality
Confidentiality should be considered as one of the audit principles. It consists in the fact that audit organizations or individual specialists are obliged to ensure the absolute safety of the documents that they receive or draw up in the process of professional activity. Auditors do not have the right to transfer these papers or their copies (in part or in full) to third parties or orally disclose the information they contain without the consent of the head (owner) of the audited entity. The exception is situations stipulated by legislative acts in force on the territory of the Russian Federation.
Data that is revealed during the audit carried out on behalf of the inquiry body, investigator, prosecutor, judicial authorities and the arbitral tribunal can be made public only after the permission of the said structures and in the form in which the said authorities consider this possible. It should be borne in mind that the principle of confidentiality, contained in the Code of Professional Ethics of Russian Auditors, must be strictly observed, even if the distribution or disclosure of information regarding the audited economic entity does not cause him material or other damage.
According to the terms of Article 8 of the Law of the Russian Federation “On Auditing Activities”, the relevant organizations and individual specialists undertake to keep secret regarding operations in those structures where audits were performed or to which certain services related to the audit were provided. In accordance with the content and meaning of the Auditor's Code of Professional Ethics, confidentiality must be understood as the obligation to preserve information from disclosure. This is an indispensable requirement for an auditor who receives information in the process of performing professional services. Under no circumstances should he use this information in the interests of a third party or for personal purposes.
Confidentiality Requirements
If you state the information contained in the Code of Professional Ethics of Auditors briefly, it is worth emphasizing the following. The document outlines the requirements for maintaining confidentiality of the professional plan, which should include non-disclosure of information of this nature:
- Information regarding the facts, events and circumstances of an individual’s private life, allowing him to identify his personality (in other words, to find out personal data). The exception is information subject to distribution in the media in cases established by federal laws.
- Information constituting the secret of legal proceedings and investigations.
- Service data, access to which is limited by government bodies in accordance with regulatory enactments and federal laws (the so-called official secret).
- Information related to professional work, access to which is limited in accordance with the Constitution and federal laws in force in the country (we are talking about medical, notarial, auditing, lawyer secrets, secrecy of telephone conversations, correspondence, telegraphic or other messages, mail and so on Further).
- Information related to commercial work, access to which is limited by regulatory acts and federal laws (this is a trade secret).
- Data regarding the essence of the invention, utility model or industrial design before the official publication of information about them.
Professional Ethics and Independence
Independence is nothing but an absolute lack of interest (property, financial or other) for the specialist in the process of forming his own point of view in the affairs of the audited structure or any dependence on third parties. It is important to know that in the public interest all audit organizations and individual developing specialists should be independent of third parties and audited organizations.
The most effective audit procedure is carried out by independent auditors. The current legislation on the territory of the country (namely, Article 12 of the Law of the Russian Federation “On Auditing Activities”) indicates the restrictions by which the conditions for the independence of audits are specified.
Audit Organization Reputation
The ethics of auditors in professional activities is an extremely important category. They must comply with a wide range of principles or prerequisites, which not only imply the creation of a good reputation for the audit company and its employees, but are also considered generally accepted rules of conduct in the field in question. In addition to the above, it is customary to include professional conduct and good faith in such principles.
The latter involves the provision by a specialist of professional services with the proper level of care, thoroughness, efficiency, as well as the proper use of their abilities. It is important to note that the responsible and diligent attitude of the auditor to his own work should not be taken as a guarantee of infallibility.
Professional behavior should be understood as observing the priority of the interests of society and the obligation of a specialist to maintain a high reputation for his profession, to refrain from committing acts that are incompatible with the provision of services in the audit field.
It is worth adding that the standards of professional ethics of the auditor are a category that is not limited to the given rules of behavior. So, the concept of professional behavior in any case extends to all areas of the auditor. You need to know that ethics and its disciplining influence are the basis for self-regulation of its work. The specialist must always remember the interests of others. No matter how difficult their solution, one should not, given the technical points, forget about the root of the problem. It is impossible to reassess the importance for auditors and accountants of directly recognizing the spirit of the profession, which has an impact on society.
Codex Details
By means of the Code of Professional Ethics of specialists in the audit field, rules of conduct for specialists are established, fundamental principles are determined. The latter, one way or another, which must be observed by professionals in the process of fulfilling their labor functions.
To create professional ethics, the provisions of general science are applied. Ethics is nothing more than a field of philosophy related to the systematic study, consideration of the problem of social choice, with the concepts of good and bad things that a person is usually guided by, as well as with a meaning that in the end has an activity. The need to regulate the ethical behavior of professional groups arose because of responsibility to society.
In any case, auditors are responsible to other people, including those who rely on their honesty, objectivity, and independence. This contributes to the favorable implementation of commercial activities.
Professional ethics includes a set of norms that are framework in nature, however, even if they exist, the question of choice in some cases remains solely with the professional:
- Imperative - is built directly on strict rules. They must be adhered to. The disadvantage is that in this case only compliance with the principles is considered, and not the consequences of certain actions.
- Utilitarian - the consequences of certain operations are considered, and not the observance of principles (in other words, exceptions to the rules are permissible). The disadvantage is that the approach presented has a positive effect, and all others follow the norm (if this is not so, then the exception to the rule turns into a rule for everyone, as a result of which the rules of behavior are not respected).
- Generalization is an extremely reasonable combination of the above approaches. It involves solving the problem of choice and answers the question: "What would happen if everyone acted the same way in the same circumstances?" If the results of actions are undesirable, such actions are considered unethical - they should not be implemented.
Conclusion
So, we fully examined the provisions of the Code of Professional Ethics of specialists engaged in audit activities. It is worth noting that at present it is customary to distinguish domestic, national and international codes. Last adopted by the IFAC. In it you can find the standards as a whole for all accountants who are professionals in their field, and separately for professional auditors working independently.
As a national code on the territory of the Russian Federation, the Code was approved by the Audit Council at the Ministry of Finance of Russia on 28.08.2003 through protocol No. 16, and was also agreed with the Coordinating Council of the Russian Federation. professional associations of accountants and auditors. It is worth noting that it takes into account all the requirements of the current legislation in the country. The National Code was developed on the basis of the recommendations of the IFAC Code of Ethics with the utmost preservation of its sections and conceptual approaches. It establishes the rules of conduct for specialists in the field in question and defines the key principles that they must observe when implementing professional activities.
The presence of codes of different levels leads to certain contradictions. The international code in relation to this problem provides the following: if one or another provision of the national code of ethics is contrary to the provision of the international code, then the national requirement must be complied with.