In an effort to carry out a large-scale task related to the development and subsequent implementation of interconnected and coordinated rules of professional ethics for auditors, today the Audit Council under 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 accepted on August 28, 2003.
Code of Ethics
The Code of Professional Ethics for Auditors should be understood as an official detailed list of principles and values that guide Russian specialists in their professional activities. According to the terms of the code, the main goal of the audit profession is to work at the highest possible professional level, which ensures the quality performance of tasks, as well as satisfaction of the interests ofsociety.
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 as an indispensable duty and the main duty of any auditor, director and employee of an audit company.
What principles should an auditor follow?
Let's consider the principles of professional ethics of the auditor. It is worth noting that the fundamental rules that every specialist should be guided by are given in this Code, which is in force on the territory of Russia. It is advisable to include independence, honesty, due diligence and professional competence, objectivity, and confidentiality. In addition, any officer who observes the rules of professional ethics of the auditor must be guided by regulatory documentation.
Honesty and objectivity
Let's analyze the main categories presented in more detail. Thus, honesty, which is referred to in the Code of Ethics for Professional Accountants and Auditors, must be understood as 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 must be objective. By it is meantimpartiality, impartiality and not subject to one or another influence in the study of professional aspects and the formation of conclusions, conclusions.
When observing the professional ethics of the auditor in terms of objectivity, it is advisable:
- avoid relationships that allow partiality, bias, or other influence to the detriment of direct objectivity;
- not offer or accept hospitality or gifts that can reasonably be expected to significantly and unacceptably influence auditors' judgment in their professional area.
Professional competence
Professional ethics and independence of auditors is one of the most important rules of their activity. By 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 suggests that he should by all means refrain from providing services in the area in which he is incompetent. Of course, if he is not assisted by the relevant specialists. Professionals must provide audit plan services with due diligence, diligence and competence. It is their duty to constantly take care of replenishing their own experience and knowledge, and at such a level that can give both the client and the management confidence in the highest possible quality of professional services, which is based on constantly updated information in the field of legislation,audit practices and techniques.
The Code of Professional Ethics for Auditors of Russia defines professional competence as the possession of a certain amount of skills and knowledge that allow the auditor to provide professional services in a quality and qualified manner. It is important to add that specialists do not have the right to exaggerate their own knowledge and experience.
Privacy
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 documents that they receive or draw up in the course of their professional activities. Auditors do not have the right to transfer these papers or their copies (both partially and completely) to third parties or verbally disclose the information they contain without the consent of the head (owner) of the audited entity. The exception is the situations provided for by the legislative acts in force on the territory of the Russian Federation.
Data that are revealed in the course of an audit carried out on behalf of the inquiry structure, the investigator, the prosecutor, the judiciary and the arbitration court may be made public only after the permission of these structures and in the form in which the said bodies consider it possible. It should be borne in mind that the principle of confidentiality contained in the Russian Code of Professional Ethics for Auditors must be strictly observed, even ifdissemination or disclosure of information regarding the audited economic entity does not cause material or other damage to it.
According to the terms of Article 8 of the Law of the Russian Federation "On Auditing", the relevant organizations and individual specialists are obliged to keep secrets regarding transactions in those structures where audits were carried out or to which certain services were provided that accompany the audit. In accordance with the content and meaning of the Auditor's Code of Professional Ethics, confidentiality should be understood as the obligation to protect information from disclosure. This is an indispensable requirement for an auditor who receives information in the course of performing professional services. Under no circumstances should he use this information for the benefit of a third party or for personal gain.
Privacy Policy
If the information contained in the Code of Auditors' Professional Ethics is summarized briefly, it is worth emphasizing the following. The document outlines the confidentiality requirements of a professional plan, to which it is advisable to include non-disclosure of information of this nature:
- Information regarding the facts, events and circumstances of the private life of an individual, allowing to identify his personality (in other words, to find out personal data). The exception is information to be disseminated in the media in cases established by federal laws.
- Information constituting the secrecy of legal proceedings andconsequences.
- Proprietary data that is restricted by government regulations and federal laws (called official secrets).
- Information related to professional work, access to which is restricted in accordance with the Constitution and federal laws in force in the country (we are talking about medical, notary, audit, lawyer, telephone conversations, correspondence, telegraph or other messages, postage and so on).
- Information related to commercial work restricted by regulations and federal laws (trade secret).
- Data regarding the essence of an invention, utility model or industrial design before the official publication of information about them.
Professional ethics and independence
Independence is nothing more than the absolute absence of interest (property, financial related or otherwise) from a 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 it is in the public interest that all audit firms and individual developing professionals should be independent of third parties and audited firms.
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") indicates the restrictions through whichstipulates the conditions of the same independence of audits.
Reputation of the audit organization
The ethics of auditors in their 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 those listed above, these principles include professional conduct and integrity
The latter involves the provision of professional services by a specialist 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 their own work should not be taken as a guarantee of infallibility.
Professional behavior should be understood as respect for the priority of the interests of society and the duty of a specialist related to maintaining the high reputation of his profession, refraining from committing acts that are incompatible with the provision of services in the audit field.
It should be added that the auditor's professional ethics is a category that is not limited to the above rules of conduct. Thus, the concept of professional conduct in any case applies to all areas of the auditor's activities. It is necessary to know that ethics and its disciplinary influence is the basis of self-regulation of his work. Specialistmust always be mindful of the interests of others. No matter how difficult their solution may be, one should not, given the technical aspects, forget about the root of the problem. It is impossible to overestimate the importance for auditors and accountants of being aware of the spirit of the profession itself, which has an impact on society.
More about the Code
Through the Code of Professional Ethics of the Auditing Specialists, the rules of conduct for specialists are established, the fundamental principles are determined. The latter, one way or another, which must be observed by professionals in the process of performing their labor functions.
To create professional ethics, the provisions of general science are applied. Ethics is nothing more than a branch of philosophy concerned with the systematic study, with consideration of the problem of public choice, with the concepts of good and bad things that a person tends to be guided by, and with the meaning that an activity ultimately has. The need to regulate the ethical behavior of groups of professionals arose because of the responsibility to society.
Auditors are in any case responsible to other people, including those who rely on their honesty, objectivity, independence. This contributes to favorable business activities.
Professional ethics includes a set of norms that are of a framework nature, however, even if they exist, the question of choice in some cases remains solely with the professional:
- Imperative - builds directly on hardrules. They must be adhered to. The disadvantage is that in this case only adherence to principles is considered, and not the consequences of certain actions.
- Utility - considers the consequences of certain operations, rather than adherence to the principles (in other words, exceptions to the rules are acceptable). The disadvantage is that the presented approach entails a positive effect, and everyone else follows the norm (if this is not the case, then the exception to the rule becomes the 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 a solution to the problem of choice and answers the question: “What would happen if everyone acted in 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 have fully considered the provisions of the Code of Professional Ethics for professionals engaged in audit activities. It is worth noting that at present it is customary to single out internal, national and international codes. The latter was adopted by the IFAC. In it you can find the rules both in general 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 under the Ministry of Finance of Russia2003-28-08 through protocol No. 16, and 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 legislation in force 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 follow when implementing their professional activities.
The presence of codes of different levels leads to certain contradictions. In relation to this problem, the International Code provides the following: if one or another provision of the national code of ethics contradicts the provision of the international code, then the national requirement must be fulfilled.
