Introduction

The object of work is the auditors' ethics system.

The subject of the research is the activity of the system of Codes of Ethics for professional accountants and auditors.

The purpose of the work is to study professional ethics professional accountants and auditors from Russian and foreign points of view.

The analysis of the subject matter of the Codes of Ethics for professional accountants and auditors is quite relevant and is of scientific and practical interest.

The profession of a professional accountant is socially significant, which means recognizing and accepting the responsibility to act in the public interest. For the professional accountant community, society includes clients, employers, employees, professional accountancy associations, the financial community, and others who rely on the objectivity, independence, and integrity of professional accountants to ensure the orderly conduct of their business. Therefore, the responsibilities of a professional accountant are not limited to meeting the needs of an individual client or employer. Acting in the public interest, a professional accountant is required to comply with and comply with the requirements of the Code of Ethics for Professional Accountants and Auditors.

Code of Conduct for Accountants. For the first time, the provisions of professional accounting ethics were developed in the United States in 1987. The American Association of Accountants adopted a code of ethics for the accountant, which is updated from time to time. Its main provisions:

1) the accountant, before taking a seat, must carefully study the work of the predecessor;

2) if the predecessor is no longer working, he should be contacted with a written request;

3) if it follows from a preliminary acquaintance with the cases that the employer violates or may violate the current legislation, the accountant must refuse the offer (work);

4) the accountant has no right to demand that the administration know and understand what he is doing;

5) the accountant cannot demand a promotion himself;

6) the employer's profits cannot include a share for the chief accountant, i.e. the accountant cannot receive a premium or additional payment for the financial results that he himself has derived;

7) the accountant should not advise the employer how to commit and hide the traces of his crime;

8) the employer and the accountant are jointly and severally liable for misrepresentation of the reporting;

9) the accountant is obliged to regularly improve his professional qualifications, etc. It is believed that the existence of the code strengthens the status of the accountant and increases the demand from employers for his work.

Auditing has become a prominent feature of modern economic life. Qualified auditors are relatively highly paid professionals. The auditor bases his activities on the trust of clients and users of financial statements. The organization selects and invites a qualified, objective auditor who enjoys the confidence of shareholders and all other persons interested in accounting information. A number of mandatory requirements and restrictions in the activities of the auditor are determined in legislative acts. They form the legal foundations of the auditing profession.

The community of auditors and their organizations, united by the Audit Chamber of Russia, is called upon to improve audit in the country, to foster high moral qualities in auditors and consultants, to strictly monitor the observance of not only legal, but also ethical standards of professional and human behavior by auditors.

1 The origin of professional ethics

Finding out the origin of professional ethics is to trace the relationship of moral requirements with the division of social labor and the emergence of a profession. Aristotle, then Comte, Durkheim paid attention to these questions many years ago. They talked about the relationship between the division of social labor and the moral principles of society. For the first time, materialistic substantiation of these problems was given by K. Marx and F. Engels.

The emergence of the first professional and ethical codes refers to the period of the artisan division of labor in the conditions of the formation of medieval guilds in the 11th-12th centuries. It was then that for the first time the existence of a number of moral requirements in the shop manuals in relation to the profession, the nature of labor, and accomplices in labor was ascertained.

However, a number of professions that are vital for all members of society originated in ancient times, and therefore, such professional and ethical codes as the "Hippocratic Oath", the moral principles of the priests who performed judicial functions, are known much earlier.

The emergence of professional ethics in time preceded the creation of scientific ethical teachings, theories about it. Everyday experience, the need to regulate the relationship of people of a particular profession led to the realization and formulation of certain requirements of professional ethics. Professional ethics, having arisen as a manifestation of everyday moral consciousness, then developed on the basis of the generalized practice of behavior of representatives of each professional group. These generalizations were contained in both written and unwritten codes of conduct, and in the form of theoretical conclusions. Thus, this testifies to the transition from everyday consciousness to theoretical consciousness in the sphere of professional morality. Public opinion plays an important role in the formation and assimilation of the norms of professional ethics. The norms of professional morality do not immediately become generally accepted; this is sometimes associated with a struggle of opinions. The relationship between professional ethics and social consciousness also exists in the form of tradition. Various types of professional ethics have their own traditions, which testifies to the presence of continuity of the basic ethical standards developed by representatives of a particular profession over the centuries. Professionalism as a moral personality trait.

1.1 Professionalism as a moral personality trait

Professional ethics is a set of moral norms that determine a person's attitude to his professional duty.

The moral relations of people in the labor sphere are regulated by professional ethics. Society can function and develop normally only as a result of a continuous process of production of material and values.

Professional ethics studies:

relationship labor collectives and each specialist separately;

moral qualities, personality of a specialist who provide

the best fulfillment of professional duty;

relationships within professional teams, and those

specific moral standards inherent in this profession;

features of professional education.

Professionalism and attitude to work are important characteristics of the moral character of an individual. They are of paramount importance in the personality characteristics of the individual, but at different stages historical development their content and assessment varied significantly. V class society they were determined by social inequality of types of labor, the opposite of mental and physical labor, the presence of privileged and unprivileged professions. The class nature of morality in the world of work is evidenced by the written in the first third of the 2nd century BC. Christian biblical book "The Wisdom of Jesus, the Son of Sirach", which contains a lesson on how to treat a slave: "fodder, a stick and a burden are for the donkey; bread, punishment and work are for the slave. Engage the slave with work and you will have peace ; loosen up his hands - and he will seek freedom. " V Ancient Greece physical labor in terms of value and significance was at the lowest estimate. And in feudal society, religion viewed labor as a punishment for original sin, and paradise was presented as eternal life without labor.

The situations in which people find themselves in the process of performing their professional tasks have a strong influence on the formation of professional ethics. In the process of labor, certain moral relations are formed between people. They contain a number of elements inherent in all types of professional ethics.

First, it is the attitude towards social labor, towards the participants in the labor process.

Secondly, these are the moral relations that arise in the area of ​​direct contact of the interests of professional groups with each other and with society.

Professional ethics are not the result of inequality in the degree of morality of various professional groups. It's just that the society shows increased moral requirements for some types of professional activity. Basically, these are such professional spheres in which the labor process itself requires the coordination of the actions of all its participants. Particular attention is paid to the moral qualities of workers in the field, which are associated with the right to dispose of people's lives, here we are talking not only about the level of morality, but also, first of all, about the proper performance of their professional duties. The labor activity of people of these professions, more than any other, does not lend itself to preliminary regulation, does not fit within the framework of official instructions. She is inherently creative. The peculiarities of the work of these professional groups complicate moral relations and add to them new item: interaction with people - objects of activity. Here, moral responsibility takes on decisive importance. The society considers the moral qualities of the employee as one of the leading elements of his professional suitability. General moral norms should be specified in a person's labor activity, taking into account the specifics of his profession.

Thus, professional morality should be considered in unity with the generally accepted moral system. Violation of work ethics is accompanied by the destruction of general moral attitudes, and vice versa. An employee's irresponsible attitude to professional duties poses a danger to others, harms society, and can ultimately lead to the degradation of the personality itself.

In modern society personal qualities individual begin with his business characteristics, attitude to work, the level of professional suitability. All this determines the exceptional relevance of the issues that make up the content of professional ethics. Genuine professionalism is based on such moral standards as duty, honesty, exactingness towards oneself and one's colleagues, responsibility for the results of one's work.

2 From audit history

The profession of an independent accountant-auditor emerged in the 19th century. in joint stock companies in Europe. This was due to the need for an objective assessment of the statements of the joint-stock company, obtaining reliable data on the financial position of the enterprise. These objective data could only be provided by a specialist independent of the firm. It can be noted that accountants-auditors appeared in Great Britain in the middle of the 19th century, where a statutory audit law was passed in 1862, in France in 1867, and in the USA in 1937.

Until the beginning of the XX century. the independent audit in the United States of America was based on the English model, which provides for detailed studies of balance sheet data. In this regard, R. Montgomery called the American audit of this early stage "accounting audit", noting that three quarters of the auditor's working time was spent on calculations and preparation of accounting books. The first formal US audit ordinance was published in 1917 and was dedicated to "auditing balance sheets." This regulation was prepared by the American Institute of Certified Public Accountants (now the American Institute of Certified Certified Public Accountants - AICPA).

The standardization of auditing in the United States began in 1939, when the AICPA established the Audit Procedures Committee and it issued the Audit Procedure Regulations. Until 1972 this Committee issued 54 Regulations. The Committee was then transformed into the Auditing Standards Executive Committee (later renamed the Auditing Standards Board). The Council has summarized all the Regulations and brought them together in the form of the Regulations on the audit procedure, which is currently in force.

In 1880 the Institute of Chartered Accountants was founded in England and Wales. One hundred years later, it had 76,000 members. This institute carries out a great deal of methodological work, develops accounting and auditing standards, publishes the journal "Accountants", which publishes a variety of materials on audit.

In Germany, the first attempt at introducing audit was made in 1870, when an amendment to the law on joint-stock companies obliged the supervisory boards of these companies to check the main reporting forms - the balance sheet and the profit distribution statement - and report the results of the audit at general meetings of shareholders.

The methodology for organizing an external audit was more clearly formulated in the regulations regarding joint-stock companies in 1931. In 1932, the Institute of Auditors was created in Germany, which existed until 1941. After the end of World War II, the Institute of Auditors was formed in Dusseldorf, which was renamed in 1954. to the Institute of Auditors of Germany. It has won high prestige and is essentially an all-German organization.

At present, the Institute of Auditors includes more than 6,000 auditors and 700 audit organizations. The main condition for membership is voluntary but strict adherence to professional rules, including adherence to ethical standards.

State influence on auditing in Germany is determined by the fact that all auditors and audit firms must be members of the German Audit Chamber.

There are two main auditing bodies in France: the Chamber of Expert Accountants and National company account commissioners. The main difference between accountants and account commissioners is that the former are invited to conduct audits of accounting and reporting in joint stock companies, while the latter are appointed without fail in accordance with the existing law on joint stock companies. Account commissioners carry out the most critical checks; the profession of an expert accountant is not so strictly regulated by government agencies.

In Italy, only persons registered in a special personal register controlled by the Ministry of Justice can carry out legal audit activities in accordance with the 1992 Government Decree. Only auditors who have passed exams in accounting, law, computing and computer science can get into this register. Applicants for the title of auditor can be specialists with higher economic, legal and commercial education with at least three years of practical experience.

In 1983, the Audit Administration in China was established and the first audit firms appeared, which have now reached a fairly high level of development.

Audit is becoming more widespread in the countries of the Commonwealth of Independent States (CIS). Belarus, Kazakhstan, Russia, Uzbekistan and Ukraine have adopted laws on auditing. In the CIS, the process of certification of auditors and issuance of licenses has been established, both for audit firms and for auditors working as entrepreneurs.

In Russia, auditing and the profession of an auditor in their modern form appeared relatively recently in connection with the economic transformations in the country. Meanwhile, as noted by a well-known specialist in the field of audit, control and audit prof. Yu.A. Danilevsky, attempts to create an audit institution in Russia were made in 1889, 1912 and 1928, but they all ended in failure. The fourth attempt, undertaken at the end of the 80s of the last century, turned out to be, as practice has shown, the most successful.

2.1 Formation and development of audit in Russia

The first stage (1987-1993) was characterized, on the one hand, by the directive nature of the creation of audit organizations (1987 - the creation of the first audit organization "Interaudit"), on the other hand, by the spontaneous nature of the emergence of audit activities (personnel training, disordered issuance of the first certificates and licenses in the period 1990-1993).

The second stage (December 1993 before the adoption of the Federal Law "On Auditing" - August 2001) is the period of the formation of Russian audit, in the process of which the Provisional Rules for Auditing, approved by the Decree of the President of the Russian Federation of December 22, 1993 No. 2263, Resolution of the Government of the Russian Federation of May 6, 1996 No. 482 “On Approval of Normative Documents for the Regulation of Auditing Activities” and a number of other documents.

The work on certification of auditors and licensing of auditing activities was started and carried out, auditing public associations and audit firms were created, work on conducting mandatory audits and providing audit-related services began.

For the period 1994-2001. The Central Attestation and Licensing Audit Commission (TsALAC) of the RF Ministry of Finance issued 23,600 licenses to licensees (including audit organizations - 14700 and individual auditors - 8900). The number of valid licenses was about 8,900, including 7,700 for general audit, 266 for audit of investment institutions, audit of insurers. During the same period, the TsALAC of the RF Ministry of Finance was approved to issue almost 36,500 qualification certificates of an auditor. The number of valid qualification certificates was 249,001.

For the period 1996-2000. 37 rules (standards) of auditing and one methodology of auditing were developed and approved by the Commission on Auditing Activities under the President of the Russian Federation, which constituted the methodological basis of Russian audit.

The third stage of audit activity in Russia began after the adoption of the Federal Law "On Auditing" (dated August 7, 2001, No. 119-FZ, as amended by Federal Law No. 164-FZ, dated December 14, 2001). The adoption of the Federal Law confirmed the final formation of audit in Russia, made it possible to adopt a number of normative legal acts to regulate audit activity in Russia, and to take a step towards integrating Russian audit into the international audit system.

2.2 Professional ethics of the auditor

The auditor's ethics is a system of norms of moral behavior of the auditor, the audit organization during the audit, and the provision of services related to the audit. For a long time, such a concept as medical ethics has been known, and the functions of an auditor can be compared with the functions of a doctor, only the object of the auditor's beneficial influence is not a person, but an enterprise (organization).

In October 1996, the Presidium of the Audit Chamber of Russia approved the

professional ethics of the auditors united by the chamber. It is approved by the general

The Code of Professional Ethics for Auditors first appeared in Russian history. The very procedure of its application is unique and unusual. Auditors undertake to voluntarily and conscientiously comply with established standards of professional conduct. Therefore, they need not only to be known, but also to be understood. The Code contains the following ethical standards:

Generally accepted moral standards and principles

Public interest

Objectivity and attentiveness of the auditor

Auditor's professional competence

Client confidential information

Tax relations

Professional service fees

Relationship between auditors

Employee relations with the audit firm

Incompatible actions of the auditor

Audit services in other states

I think it appropriate to comment on some of the norms contained in the Code.

The ethical code of auditors summarizes the ethical standards of professional conduct of independent auditors, defines the moral, moral values ​​that the audit community affirms in its environment, ready to protect them from all possible violations and encroachments. Compliance with universal and professional ethical standards is an indispensable duty and the highest duty of every auditor, manager and employee of an audit firm.

The Code of Ethics contains the following requirements.

Auditors are obliged to adhere to universal human moral rules and ethical norms in their actions and decisions, to live and work according to their conscience; observe the rules of general morality, truthfulness and honesty in actions and decisions, independence and objectivity in judgments and conclusions, intransigence to injustice.

Respect for the public interest.

The external auditor is obliged to act in the public interest and all users of the financial statements, not just the customer. Protecting the interests of the client in tax, judicial and other authorities, as well as in his relationships with other legal entities and individuals, the auditor must be convinced that the interests to be protected arose on legal and fair grounds. As soon as the auditor becomes aware that the protected interests of the client arose in violation of the law or justice, he is obliged to refuse protection.

The objectivity of the auditor.

Auditors should not present facts knowingly inaccurate or biased.

Providing any professional services, auditors are required to objectively consider all emerging situations and real facts, not to allow personal bias, prejudice or pressure from the outside to affect the objectivity of their judgments.

The auditor should avoid relationships with persons that could affect the objectivity of his judgments and conclusions, or immediately stop them, indicating the inadmissibility of pressure on the auditor in any form.

Auditor's attentiveness.

When performing professional services, the utmost care should be taken. Auditors must take their responsibilities carefully and seriously, comply with approved auditing standards, adequately plan and control work, and check subordinate specialists.

Auditor independence.

Auditors are obliged to refuse to provide professional services if there are reasonable doubts about their independence from the client organization and its officers in all respects. In the opinion or in another document drawn up as a result of the services rendered, the auditor is obliged to knowingly declare his independence in relation to the client.

The main circumstances that may prejudice the independence of the auditor or raise doubts about his actual independence:

1) upcoming (possible) or ongoing litigation (arbitration) cases with

organization of the client;

2) financial participation of the auditor in the affairs of the client's organization in any form;

3) financial and property dependence of the auditor on the client (for example,

joint participation in investments);

4) indirect financial participation (financial dependence) in the organization

the client through relatives, employees of the company, through the main and subsidiary organizations, etc.;

5) kinship and friendship with directors and higher

the client's personnel management;

6) excessive customer hospitality, as well as receiving goods from him and

services at prices significantly reduced relative to real market prices;

7) participation of the auditor (heads of audit firms) in any bodies

management of the client's organization, its main and subsidiary organizations;

audit firms) on financial investments in organizations in which they themselves have any financial interests;

9) previous work of the auditor in the client's organization or in the manager

organizations in any position;

10) proposals from the client on the appointment of an auditor to the management and other

position in the client's organization.

For the above circumstances, independence is considered violated if they arose, continued to exist or were terminated in the period for which professional audit services are to be performed.

The main circumstances that may prejudice the independence of the audit firm or raise doubts about its actual independence:

1) if the audit organization participates in the financial and industrial

a group, a group of credit institutions or a holding company and provides professional audit services to organizations that are part of this financial-industrial or banking group (holding);

2) if the audit organization arose on the basis of a structural unit

a former or current ministry (committee) or with the direct or indirect participation of a former or current ministry (committee) and provides services to organizations previously or currently subordinate to this ministry (committee);

3) if the audit organization arose with direct or indirect participation

banks, insurance companies or investment institutions and provides services to organizations whose shares are owned, purchased or acquired by the above-mentioned structures during the period for which the audit firm must provide services.

In cases where the auditor performs other services on behalf of the client (consulting, reporting, accounting, etc.), it is necessary to ensure that they do not violate the independence of the auditor. The independence of the auditor is ensured when:

1) the auditor's advice does not escalate into management services

organization;

2) there are no reasons and situations that affect the objectivity of the auditor's judgments;

3) personnel involved in accounting and compiling

reporting, is not involved in the audit of the client's organization;

4) responsibility for the content of accounting and reporting

is assumed by the client's organization.

Professional competence of the auditor.

Auditors are required to provide a sufficient professional level of audit services required by the client.

Assuming the obligation to provide certain professional services, the auditor must be confident in his competence in this area, have the necessary amount of knowledge and skills in order to fulfill obligations in a conscientious and professional manner, guarantee the client audit services based on modern methods using all, including the latest, regulations.

The auditor is obliged to refrain from providing professional services that go beyond his competence, and also do not correspond to his qualification certificate.

The audit firm can attract competent specialists to help the auditor in solving specific tasks.

The professional competence of an auditor is based on general and specific higher education, passing certification exams, confirmed by appropriate diplomas and certificates, as well as on the experience of continuous practical work in the provision of professional audit services together with other specialists of this profile and professional level.

The auditor is obliged to constantly update his professional knowledge in the field of accounting, taxation, financial activities and civil law, organization and methods of audit, legislation, Russian and international norms and standards of accounting and auditing.

To ensure the quality of professional services, the auditor must strictly follow Russian and international auditing standards.

Confidential information of clients.

The auditor is obliged to keep confidential information about clients' affairs obtained in the provision of professional services without time limits and regardless of the continuation or termination of direct relations with them.

The auditor should not use confidential information of the client, which became known to him in the performance of professional services, for his own benefit or for the benefit of any third party, as well as to the detriment of the interests of the client.

Publication or other disclosure of confidential information of clients is not a violation of professional ethics in the following cases:

1) when it is done with the permission of the client, as well as taking into account the interests of all

the parties that it may affect:

2) when it is provided by legislative acts or decisions

the judiciary;

3) to protect the professional interests of auditors during the official

an investigation or private proceeding conducted by directors or authorized representatives of clients;

4) when the client involved the auditor in actions that contradict

professional standards.

The auditor is responsible for maintaining confidential information by assistants and all firm personnel.

Tax relations.

Auditors are required to strictly comply with tax laws in all aspects: they must not knowingly hide their income from taxation or otherwise violate tax laws in their own interests or in the interests of others.

When providing professional taxation services, the auditor is guided by the interests of the client. At the same time, he is obliged to comply with tax laws and must not facilitate falsifications in order to evade the client from paying taxes and deceive the tax service.

The auditor is obliged to inform the client's administration and the audit commission of the joint-stock (business) company in writing about the facts of violation of tax legislation, errors in calculations and payment of taxes revealed during the mandatory audit and warn them about the possible consequences and ways of correcting violations and errors.

The auditor is obliged to provide advice and advice in the field of taxation to the client only in writing. At the same time, he should not reassure the client that his recommendations exclude any problems with the tax authorities, and should also warn the client that the responsibility for the preparation and content of tax returns and other tax reporting lies with the client.

Professional service fees.

The fee for the professional services of an auditor meets the standards of professional ethics if it is paid depending on the volume and quality of the services provided. It may depend on the complexity of the services provided, qualifications, experience, professional authority and the degree of responsibility of the auditor.

The amount of payment for professional services of auditors should not depend on the achievement of any particular result or be conditioned by other circumstances, other than those indicated above.

The auditor has no right to receive payment for professional services in cash in excess of the generally established calculation standards. The auditor must refrain from paying or receiving commissions for the acquisition or transfer of customers or the transfer of third party services to anyone.

The auditor is obliged to agree in advance with the client and fix in writing the conditions and procedure for payment for his professional services. The auditor is not obliged to announce in advance the prices for the services provided.

Doubts about the observance of professional ethics are caused by the situation when the payment of one client makes up all or most of the auditor's annual revenue for professional services rendered.

Relationship between auditors.

Auditors are obliged to treat other auditors benevolently, refrain from unjustified criticism of their activities and other deliberate actions that harm colleagues.

The auditor should refrain from disloyal to a colleague when the auditor is replaced by a client, assist the newly appointed auditor in obtaining information about the client and the reasons for the replacement of the auditor. The newly appointed auditor is informed in writing in compliance with the norms.

The newly invited auditor, if such an invitation was not made based on the results of a competition held by the client, before agreeing to the offer, is obliged to send a written request to the former auditor and make sure that there are no professional reasons for refusing it.

A newly invited auditor who has not received a response from the previous auditor to his request within a reasonable time and, despite the efforts made, who does not have any other information about the circumstances that hinder his cooperation with this client, has the right to give a positive response to the proposal received.

The auditor has the right in the interests of his client and with his consent to invite other auditors and other specialists to provide professional services. Relations with other auditors (specialists), hired additionally, must be businesslike and correct.

Auditors (specialists), additionally involved in the provision of services, are obliged to refrain from discussing with the client's representatives of business and professional qualities main auditors, to show maximum loyalty to the colleagues who invited them.

The relationship of employees with the audit firm.

Certified auditors who agree to become employees of an audit firm are obliged to be loyal to it, by all their activities to contribute to the authority and further development of the firm, to maintain business, friendly relations with the directors and other employees of the firm, directors and staff of clients.

The relationship between employees and the audit firm should be based on mutual responsibility for the performance of professional duties, on dedication and impartiality, continuous improvement of the organization of audit services, their professional content.

A certified auditor who often changes audit firms or suddenly leaves it and thereby causes certain damage to the firm violates professional ethics.

The managers (employees) of the audit firm refrain from discussing with third parties professional and personal qualities their former employees and colleagues, unless these former employees caused by their actions significant damage to the profession and the legitimate interests of the company.

At the request of the head of the audit firm in which the auditor is employed, the head of the audit firm, of which the auditor was previously an employee, can give a written recommendation indicating the professional and personal qualities of the auditor.

An auditor who, for one reason or another, leaves the audit firm, must, in good faith and in full, transfer to the firm all the documentation and other professional information he has.

3 Professional ethics of an accountant

The Code of Ethics contains the following requirements. A professional accountant must abide by the following basic principles of conduct:

a) honesty;

b) objectivity;

c) professional competence and due diligence;

d) confidentiality;

e) professional behavior.

Honesty

1.2. A professional accountant must act openly and honestly in all professional and business relationships. The principle of honesty also presupposes fair dealing and truthfulness.

1.3. A professional accountant should not deal with statements, documents, messages or other information if there is reason to believe that:

a) the information contains materially incorrect or misleading statements;

b) the information contains statements or data prepared carelessly;

c) the information contains omissions or distortions of the necessary data where they can be misleading.

1.4. A professional accountant will not be considered in violation of clause 1.3 if he issues a report adjusted for the reasons given in this clause.

Objectivity

1.5. A professional accountant should not allow bias, conflicts of interest, or others to interfere with the objectivity of his professional judgment.

1.6. A professional accountant may find himself in a situation that could damage his objectivity. It is not possible to define and describe all such situations. A professional accountant should avoid relationships that could distort or influence their professional judgment.

Professional competence and due diligence

1.7. A professional accountant is obliged to constantly maintain his knowledge and skills at a level that ensures the provision of qualified professional services to clients or employers, based on the latest achievements of practice and modern legislation. In providing professional services, a professional accountant must act with due diligence and in accordance with applicable technical and professional standards.

1.8. Qualified delivery of a professional service involves the formation of informed judgment regarding the application of professional knowledge and skills in the process of providing a service. Provision of professional competence can be divided into two independent stages:

a) achieving the proper level of professional competence;

b) maintaining professional competence at the proper level.

1.9. Maintaining professional competence requires constant awareness of relevant technical, professional and business innovations. Continuous professional development develops and maintains the abilities that enable a professional accountant to work competently in a professional environment.

1.10. Diligence is understood as the obligation to act in accordance with the requirements of the assignment (contract), carefully, thoroughly and in a timely manner.

1.11. A professional accountant should take steps to ensure that those who work under him in a professional capacity have the necessary training and direction.

1.12. Where appropriate, a professional accountant should advise clients, employers or other users of professional services of the inherent limitations of those services in order to avoid interpreting the professional accountant's opinion as a statement of fact.

Confidentiality

1.13. A professional accountant must maintain the confidentiality of information obtained as a result of a professional or business relationship and must not disclose this information to unauthorized third parties, unless the professional accountant has a legal, professional right or obligation to disclose such information. Confidential information obtained as a result of a professional or business relationship should not be used by a professional accountant to gain any benefits for them or third parties.

1.14. A professional accountant must maintain confidentiality even outside of his professional environment. A professional accountant should be aware of the possibility of inadvertent disclosure of information, especially in the context of maintaining long-term relationships with business partners or their close relatives or family members.

1.15. A professional accountant must respect the confidentiality of information disclosed to him by a potential client or employer.

1.16. A professional accountant must maintain the confidentiality of information within his organization or in his relationship with employers.

1.17. A professional accountant should take all reasonable steps to ensure that those who work under him and those from whom he receives advice or assistance respect his duty to maintain confidentiality with due respect.

1.18. Even after the end of the relationship between the professional accountant and the client or employer, the confidentiality principle remains imperative. When changing jobs or starting work with a new client, a professional accountant has the right to use previous experience. However, a professional accountant should not use or disclose confidential information obtained as a result of a previous professional or business relationship.

1.19. A professional accountant should or may be required to disclose confidential information in the following cases:

a) the disclosure is permitted by law and / or authorized by the client or employer;

b) disclosure is required by law, for example:

when preparing documents or presenting evidence in a different form in the course of court proceedings;

when reporting the facts of violation of the law that have become known to the appropriate government authorities;

c) disclosure is a professional duty or right (unless prohibited by law):

when checking the quality of the work of an organization - a member of a professional organization or the professional organization itself;

when requested or investigated by a member organization, professional organization or supervisory authority;

when a professional accountant defends his professional interests in the course of legal proceedings.

1.20. When deciding whether to disclose confidential information, a professional accountant should consider the following:

a) whether the interests of any of the parties, including third parties, whose interests may also be affected, will be prejudiced if the client or employer has permission to disclose information;

b) whether the information is sufficiently known and reasonably substantiated. In a situation where there are unfounded facts, conclusions, incomplete information or unfounded conclusions, professional judgment should be used to determine in what form the information should be disclosed (if necessary);

c) the nature of the expected message and its addressee. In particular, a professional accountant must be confident that the intended recipients of the communication are the intended recipients.

Professional conduct.

1.21. A professional accountant must comply with relevant laws and regulations and avoid any action that discredits or may discredit the profession, or that a reasonable and knowledgeable third party with all the necessary information would perceive as detrimental to the good reputation of the profession.

1.22. When proposing and promoting his candidacy and services, a professional accountant should not discredit the profession. A professional accountant must be honest and truthful and must not:

a) make statements about the exaggerated quality of the services that he can provide, his qualifications and acquired experience;

b) give disparaging comments about the work of other professional accountants or make unreasonable comparisons of their work with the work of other accountants.

Conclusion

Accountants and auditors of public, charitable, non-profit organizations in their work are guided by the ethical standards adopted in the independent sector as a whole.

1) dedication, striving to fulfill the mission of the organization

2) voluntariness and disinterestedness

3) commitment to the public good

4) respect for the value and dignity of the individual

5) tolerance and the pursuit of social justice

6) responsibility to society

7) openness and honesty

8) frugality in relation to funds

9) compliance with laws.

Basic principles of everyday ethics:

1) Be a model of personal behavior

2) In the process of work, act in accordance with the values ​​and purpose of your profession

3) Serve your profession for the benefit of others

4) Do not participate in cases involving lies, deceit, forgery

5) Strive to improve their professional knowledge and practical experience, to put official duty above all else

6) Do not use professional relationships to achieve personal goals

7) Maintain the confidentiality of the information received

8) Direct efforts to prevent inhuman or discriminatory actions directed against one person or groups of people.

Professional organizations develop detailed codes of professional ethics for accountants and auditors, trying to anticipate every possible nuance of their behavior.

The ethical code of accountants and auditors summarizes the ethical standards of professional behavior, defines the moral, moral values ​​that the community asserts in its environment, ready to protect them from all possible violations and encroachments.

Compliance with universal and professional ethical standards is an indispensable duty and the highest duty of every accountant and auditor, manager and employee of the company.

Much is said about the ethics of professional auditors, but little is done to educate reputable, highly qualified specialists. Ethical issues are encountered on a daily basis on the professional path of an accountant and auditor. They need to be resolved with dignity, and for this it is necessary to know the norms of professional behavior, to prepare oneself for their strict observance.

List of sources used

Code of Ethics for Members of the Institute of Professional Accountants of Russia

(approved by the Decision of the IPBR Presidential Council, Minutes No. 08/03 dated September 26, 2007)

Code of Ethics for Auditors of Russia (approved by the Audit Council

activities under the Ministry of Finance of Russia, protocol No. 56 of May 31, 2007)

The need for a code ethics behavior exists mainly for ... the need for special rules Conduct - Code ethics auditors Russia. Approved by the Audit Council for ...

1. Ethico legal mechanisms of audit

   Abstract >> Accounting and audit

   Professional Code ethics auditors RK is approved by the Audit Chamber. Ethics professional behavior auditors defines moral ... possible violations and encroachments. Codex ethics auditors Codex ethics auditors includes 12 basic rules ...

2. Key provisions of the Code ethics professional accountants of the international federation of accountants

   Test work >> Accounting and audit

   Codes ethics professional accountants and auditors... The purpose of the work is to study professional ethics professional accountants and auditors with ... each accountant and auditor, head and employee of the firm. About ethics auditors-pros talk a lot ...

3. Ethics and responsibility in PR

   Codex >> Communication and communication

   Attitude towards the target organization audience... Compose a message. Here ..., A Beketov, F. Sarokvasha. 3.1. Questions ethics in the work of a public relations specialist ... the following: the basic principle of professional ethics communications specialist ...

Introduction

The first part of the abstract talks about the ethics of the auditor. One of the most important tasks of the formation of the auditing profession is the development of ethical standards that could guide Russian auditors in their activities. Initially unwritten, but strictly adhered to, these norms were subsequently enshrined in the so-called ethical codes of audit. The hallmark of the audit profession is the recognition and acceptance of the responsibility to act in the public interest, i.e. their opinion on financial statements and accounting procedures should reflect the real state of affairs. Therefore, the auditor's responsibility is not limited to meeting the needs of an individual client or employer. Acting in the public interest, the auditor is required to comply with and comply with the auditor's professional ethics.

The second question provides evidence that the auditor does not search for facts in the audit process that indicate the presence of distortions in the financial statements.

Auditor Ethics

The need to write a code of ethics for auditors is due to the fact that representatives of the auditing profession, when conducting an audit of an organization, individual entrepreneur, work not only for them - they are obliged to act primarily in the public interest. Violation of ethical norms entails censure, condemnation from colleagues, as well as specially created courts at audit chambers. In more serious cases, such serious punishments as a large monetary fine and suspension from work, temporarily or permanently, can be applied to the offenders.

The Code of Ethics adopted by the Council on Auditing Activities under the Ministry of Finance of the Russian Federation on May 31, 2007 consists of nine sections:

• 1. Model of behavior of the auditor and the audit organization.
• 2. Conclusion of a contract for the provision of professional services.
• 3. Conflict of Interest.
• 4. Second opinion.
• 5. Fees and other types of remuneration.
• 6. Advertising and offering professional services.
• 7. Gifts and courtesies.
• 8. Application of the principle of objectivity in all types of services.
• 9. Applying the principle of independence to verification assignments.

The first section specifies the basic principles of professional ethics of auditors and guidance on their application, made in the form of a model of conduct for the auditor and the audit organization. By applying a behavior model, threats to violating the Core Principles can be identified, their severity can be assessed, and precautions can be taken if necessary.

The Code of Ethics for Auditors of Russia, as the fundamental principles that auditors should be guided by in order to achieve their professional goals, include:

Independence of judgments and opinions of auditors - ensured by the fact that he is not on public service, is not a staff member of any non-audit organization and therefore must fulfill his duties, i.e. carry out audit activities. In addition, auditors should not be materially interested in the activities of the audited enterprise, in other words, neither they themselves nor their close relatives can be owners, shareholders or shareholders of the audited enterprises;

Objectivity and honesty - as the inadmissibility of prejudices, biases, conflicts of interest, and other factors when forming an opinion on financial statements; professional competence and due diligence means that the auditor provides professional services with due diligence, competence and diligence, his duties include constantly maintaining professional knowledge and skills at a high level, so that the audited organizations or employers can benefit from competent professional services based on on the latest developments in the field of practice, legislation and technology;

The Code of Ethics also mentions confidentiality. The auditor must maintain the confidentiality of information obtained in the process of providing professional services, and must not use or disclose such information without proper and specific authority, unless the disclosure of such information is dictated by his professional or legal rights or obligations;

The auditor's professional conduct must be such as to maintain a good reputation for the profession - the auditor must refrain from any behavior that could discredit it. The auditor must be honest, truthful and must not:

• - make statements exaggerating the level of services that he can provide, his qualifications and experience acquired by him;
• - give disparaging comments about the work of other auditors or make unreasonable comparisons of their work with the work of other auditors.

It is necessary to note such an ethical norm as the auditor's awareness of responsibility for the consequences of his recommendations and conclusions based on the results of audits. The Law "On Auditing in the Russian Federation" specifies the sanctions that can be applied to an auditor for a poor-quality audit and unfair opinion.

The following sections outline behaviors in specific situations, in particular, precautions against threats of violation of the basic principles are indicated, as well as examples of situations where it is impossible to take sufficient precautions against threats.

The Code provides for a number of mandatory procedures for the auditor to comply with ethical requirements during the conclusion of a contract for the provision of professional services. These procedures are associated with determining the acceptability of the client and with the occurrence of conditions leading to a change in the contract. Before establishing a relationship with a new client, the auditor should consider whether the choice of that client could pose a threat to compliance with the core principles. If the client has questionable characteristics, i.e. he, for example, is involved in illegal activities, or has a reputation for dishonest counterparty, or practices questionable financial reporting, then the auditor has threats to comply with ethical principles during the execution of the contract. If the identified threats are clearly immaterial, the auditor is required to consider and, as necessary, take precautions to eliminate them or bring them to an acceptable level. Precautions include:

• - a correct understanding of the nature of the client's activities, the complexity of the operations performed by him, the specific requirements of the assignment, the purpose, nature and volume of work to be performed;
• - knowledge of the relevant industry economic activity or the subject of the assignment;
• - have experience with, or have acquired, relevant legal or reporting requirements;
• - attracting a sufficient number of employees with the required qualifications;
• - using the work of experts as needed;
• - agreement on the real deadline for the task;
• - compliance with the rules and procedures for quality control.

If the auditor finds that he can apply appropriate safeguards to the identified threats, he begins the engagement process. If threats cannot be reduced to an acceptable level, then the auditor should refuse to enter into a relationship with the client.

The Code of Ethics considers a conflict of interest as a result of the activities or interests of the auditor himself, which are the subject of a conflict with this client, or as a result of the auditor's services to a third party in respect of which, in the client's opinion, he has a conflict of interest. The auditor is directed to take reasonable steps to identify the circumstances in which a conflict of interest may arise, as these circumstances may lead to a threat of violation of the core principles. If, in the auditor's judgment, these threats are not clearly insignificant, the auditor is instructed to take appropriate precautions to eliminate such threats or reduce them to an acceptable level.

The Code provides a list of these precautions. This notice:

• - the client's business interests or activities that may represent a conflict of interest;
• - all related parties that the auditor is providing services to two or more parties in relation to a subject that causes a conflict of interest for these parties;
• - the client that the auditor, in the provision of the requested services, works for many clients (for example, in a specific market sector or for a specific type of assignment).

In each case, the auditor should seek the consent of the client (all parties) to act in such circumstances. If consent is obtained, the auditor can also apply a number of safeguards, such as:

• - the use of independent independent groups responsible for the task;
• - the application of procedures that prevent access to information (for example, strict physical isolation of groups from each other, confidentiality and secure storage of information);
• - there are clear instructions for team members on security and confidentiality issues;
• - use of warnings about observance of confidentiality rules, signed by employees and managers of the audit organization.

An auditor who does not receive, in response to his request, the client's consent to work for a third party in respect of which there are signs of a conflict of interest should refuse to continue working for one of the parties.

In the presence of a conflict of interest in the course of identifying threats, it is possible that threats of violation of one or more basic principles (for example, the principles of objectivity, confidentiality and professional behavior) are created at the same time, which cannot be eliminated or reduced to an acceptable level by means of precautions. In this case, the auditor is required to make a decision on the impossibility of accepting such an engagement or on the need to terminate one or more conflicting engagements.

The Code addresses the ethical requirements for an auditor in a situation when a company that is not a client turns to him with a request to express a second opinion on the application of the rules (standards) of accounting, auditing, accounting reporting, etc. in specific circumstances or in relation to specific operations of this company.

In this case, the auditor faces threats of violation of ethical principles, and he must assess the significance of such threats. If the identified threats are clearly not significant, the auditor should consider and, as necessary, take precautions to eliminate them or reduce them to an acceptable level. The Code provides for the following precautions:

• - requesting the client for permission to communicate with the auditor serving him;
• - limitations inherent in any opinion expressed when communicating with this client;
• - providing a copy (in writing) of his opinion to the auditor serving this client.

An auditor who is not authorized by the company requesting the second opinion to communicate with the serving auditor should, after weighing all the circumstances, decide whether the second opinion is appropriate.

Section 5 of the Code provides that when negotiating professional services, the auditor can charge any fee that he considers appropriate to his services. If one auditor assigns a fee lower than others, it is not considered unethical. There may be a risk of violating basic principles from the fees charged. The severity of the threats depends on factors such as the level of the assigned fee and the services to which the fee applies. With these threats in mind, precautions should be considered and, if necessary, taken to eliminate the threats or reduce them to an acceptable level. Such measures can be:

• - familiarizing the client with the terms of the assignment and, in particular, with the methodology for calculating payment and the volume of services provided;
• - the allocation of adequate time and qualified personnel to complete the task.

The Code states that in the event that the auditor seeks new orders for the provision of his services through advertising and other methods of working in the market, there may be threats of violation of the basic principles. When offering and promoting their services on the market, the auditor should not discredit the profession. The auditor must be honest and truthful and must not:

• - make statements that exaggerate the level of services that he can provide, his qualifications or acquired experience;
• - give disparaging comments about the work of other auditors or make unreasonable comparisons of their work with the work of other auditors.

If in doubt about the proposed form of advertising or market practices, the auditor should consult with the appropriate body of the self-regulatory body of auditors.

The Code of Ethics establishes the criterion that the auditor should use when determining the significance of threats of violation of the basic principles that arise when the client offers the auditor and his family members gifts and other signs of attention. If a reasonable and well-informed third party can find such gifts are clearly insignificant, the auditor may consider that such an offer was made in the course of normal business relations and does not contain a specific intent to influence the auditor's judgment or obtain any information from the auditor. In such cases, the auditor may consider that there is no significant threat of a violation of the fundamentals.

In all cases where this criterion is not met, the auditor should take precautions. And if it turns out that it is impossible to eliminate the threat or reduce it to an acceptable level, the auditor should not accept the gift or token of attention offered to him.

The Code addresses the threats of violation of the principle of objectivity in the provision of professional services. It states that the threats that arise will depend on the specific circumstances of the engagement and the nature of the work performed by the auditor.

The auditor is directed to assess the severity of such threats and, if they are not clearly insignificant, provide and, as necessary, take appropriate precautions to eliminate the threats or reduce them to an acceptable level. These measures include:

• - exclusion of the person in respect of whom the threat arises from the composition of the group performing the task;
• - implementation of procedures for supervision of the audit engagement;
• - termination of a financial or business relationship that causes a threat;
• - Discussion of problems with senior management of the audit organization;
• - discussion of problems with the authorized persons of the client.

Section 9 of the Code formulates a conceptual approach to the independence of the auditor during the performance of various assignments, which assumes that “considering the acceptance or continuation of the assignment, as well as the required precautions or the presence of a particular employee as a member of the audit team. The audit firm is required to assess all the attendant circumstances, the nature of the engagement and threats to independence. " When assessing threats to independence and appropriate safeguards in assessing the significance of a particular threat, both quantitative and qualitative factors should be taken into account. A matter is clearly immaterial if it can be considered trivial and not inconsequential. The public interest must be taken into account in assessing the materiality of any threats to independence and the safeguards required to mitigate them to an acceptable level.

The Code sets out the requirement that members of the audit team and employees of the audit organization must be independent from the client during the entire period of the engagement.

Applying the principle of independence in a long-term relationship with an audit client and the provision of services other than audit. Audit of physical and legal entities audit organizations and individual auditors who have provided these persons within the three years immediately preceding the audit with services for the restoration and maintenance of accounting records, as well as for the preparation of financial statements cannot be carried out. The application of the requirements of the Code in relation to the independence of the auditor who provided services to the client in the period preceding the conclusion of the contract should take into account the norms of the current legislation of the Russian Federation regarding the admissibility of the provision of certain related services, especially when identifying threats to independence and considering possible precautions against these threats.

If a company becomes an audit client during or after the period covered by the audited accounts, then the firm should consider the possibility of threats to independence due to:

• - a financial or business relationship with the audit client during or after the period covered by the accounting statements, but before the firm accepts the audit engagement;
• - services previously provided to the audit client.

When verifying the accuracy of information other than an audit of the financial statements, the auditing organization should consider whether financial or business relationship or previously rendered services. Separately, attention is drawn to the case of considering threats to independence arising from the provision of non-audit services to an audit client that cannot be provided during the execution of the audit engagement. If such services were provided during or after the period covered by the audited accounts, but before the commencement of the provision of audit-related services, then the auditor is required to consider the possibility of a threat to independence due to the provision of such services.

If, according to the assessment, such a threat is not clearly insignificant, then appropriate precautions should be foreseen and, if necessary, taken:

• - discuss independence issues related to the provision of services other than audit with the client's representatives vested with managerial powers for example with an audit committee;
• - to receive from the client confirmation of his acceptance of responsibility for the results of services that are not audits:
• - do not allow employees who provided services other than audit to participate in the audit of financial statements;
• - Engage another firm to double-check the result of services other than audit, or to re-perform these services to the extent that it can accept responsibility for them.

The Code separately considers a number of features of the application of the principle of independence for listed companies. First, if the accounting audit client is a listed company, the audit firm and its subsidiaries should consider the interests and relationships with the related companies of the audit client. Secondly, it is necessary to maintain constant communication between the audit organization and the audit committee (or with another governing body a) the listed company for the purpose of analyzing relationships and matters that, in the opinion of the firm, can reasonably be regarded as affecting independence. Thirdly, when auditing the financial statements of a listed company, the audit organization must, orally or in writing, once a year inform the client about all relations and issues arising between the audit organization, its subsidiary and the client, which, according to the professional judgment of the audit organization, can be reasonably attributed to to factors influencing independence. The issues to be reported vary according to the circumstances; the decision on reporting them should be made by the audit organization itself (4).

profession ethics audit code

Ethics is a system of norms of moral behavior of a person or any social or professional group.

For a long time, such a concept as medical ethics has been known, and the auditor is also a kind of doctor, only the object of his beneficial effect is not a person, but an enterprise (organization).

Briefly, the ethical standards of auditing can be formulated as independence; competence; conscientiousness; objectivity.

In practice, professional organizations develop codes of professional ethics for auditors in great detail and scrupulously, trying to foresee all possible nuances of their behavior.

The International Federation of Accountants (IFAC) has published a Code of Ethics for Professional Accountants, which is used by professional associations of accountants and auditors around the world to create national codes. In Russia, there are codes of such professional associations, like the Russian Collegium of Auditors and the Russian Audit Chamber.

Compliance with ethical standards of professional behavior is guaranteed by high moral qualities and professional responsibility of auditors, the objective need to support public opinion respect and trust in the profession of an auditor.

Violators of ethical standards of professional conduct show disrespect to the entire audit community and cause moral and material damage to it.

The auditing community as a whole and each auditor individually condemn the unethical behavior of individual auditors and demand their punishment, up to exclusion from their environment, deprivation of qualification certificate and license to conduct auditing activities.

Each auditor who is criticized by his colleagues for violation of the ethics of professional conduct has the right to an objective public investigation of any deviations from the norms stipulated by this Code. At the request of a specific violator, the investigation can be conducted in confidence.

The basic ethical standards include the following requirements.

Compliance with generally accepted moral standards and principles. Auditors are obliged to adhere to general human moral rules and

Chapter 5. Certification of auditors and ethical standards 103

moral norms in their actions and decisions, to live and work according to conscience;

Be guided in your actions by the universal human rule: "Try not to do to others what you would not like to be done to you"; observe the rules and norms of general morality, truthfulness and honesty in actions and decisions, independence and objectivity in judgments and conclusions, intransigence to injustice, violations of moral and ethical, as well as legal norms in all their manifestations.

Respect for the public interest. The external auditor is obliged to act in the public interest and all users of the financial statements, not just the customer. Protecting the interests of the client in tax, judicial and other authorities, as well as in his relationships with other legal entities and individuals, the auditor must be convinced that the interests to be protected have arisen on legal and fair grounds. As soon as the auditor becomes aware that the protected interests of the client have arisen in violation of the law or justice, he is obliged to refuse their protection.

The objectivity of the auditor. An objective basis for the conclusions, recommendations and conclusions of the auditor can only be a sufficient amount of required information.

Auditors should not present facts knowingly inaccurate or biased.

Providing any professional services, auditors are required to objectively consider all emerging situations and real facts, not to allow personal bias, prejudice or pressure from the outside to affect the objectivity of their judgments.

The actions of auditors, their decisions and opinions cannot depend on the judgments or instructions of others.

The auditor should avoid relationships with persons that could affect the objectivity of his judgments and conclusions, or immediately stop them, indicating the inadmissibility of pressure on the auditor in any form.

Auditor's attentiveness. The utmost care should be taken when performing professional Services. Auditors should take their responsibilities carefully and seriously, comply with approved auditing standards, adequately plan and control work, and check subordinate specialists.

Auditor independence. Auditors are obliged to refuse to provide professional services if there are reasonable doubts about their independence from the client organization and its officials in all respects.

104 Section I. Theoretical basis audit

In the conclusion or in another document drawn up as a result of the rendered professional services, the auditor is obliged to consciously but without any reservations declare his independence in relation to the client.

The main circumstances that may prejudice the independence of the auditor or give rise to doubts about his actual independence:

a) upcoming (possible) or ongoing litigation (arbitration) cases with the client's organization;

b) financial participation of the auditor in the affairs of the client's organization in any form;

c) financial and property dependence of the auditor on the client (joint participation in investments in other organizations, lending, except for banking, etc.);

d) indirect financial participation (financial dependence) in the client's organization through relatives, employees of the company, through main and subsidiary organizations, etc .;

e) family and personal friendships with directors and senior management personnel of the client's organization;

f) excessive customer hospitality, as well as receiving goods and services from him at prices significantly reduced relative to real market prices;

g) participation of the auditor (heads of the audit firm) in any governing bodies of the client's organization, its main and subsidiary organizations;

i) previous work of the auditor in the client's organization or in his managing organization in any position;

j) proposals from the client on the appointment of an auditor to a managerial and other position in the client's organization.

For the above circumstances, independence is considered violated if they arose, continued to exist or were terminated in the period for which professional audit services are to be performed.

The main circumstances that may prejudice the independence of the audit firm or raise doubts about its actual independence:

a) if the audit organization participates in the financial industrial group, in a group credit institutions or holding and provides professional audit services to the organization

Chapter 5. Certification of auditors and ethical standards 105

tions included in this financial and industrial or banking group (holding);

b) if the audit organization arose on the basis of a structural unit of a former or current ministry (committee) or with the direct or indirect participation of a former or current ministry (committee) and provides services to organizations previously or currently subordinate to this ministry (committee);

c) if the audit organization was established with the direct or indirect participation of banks, insurance companies or investment institutions and provides services to organizations whose shares are owned, purchased or acquired by the above-named structures during the period for which the audit firm must provide services.

In cases where the auditor performs other services on behalf of the client (consulting, reporting, accounting, etc.), it is necessary to ensure that they do not violate the independence of the auditor. Auditor independence is ensured when:

a) the auditor's advice does not translate into organization management services;

b) there are no reasons and situations that affect the objectivity of the auditor's judgments;

c) personnel involved in accounting and reporting are not involved in the audit of the client's organization;

d) the client organization assumes responsibility for the content of accounting and reporting.

Professional competence of the auditor. Auditors are required to provide a sufficient professional level of audit services required by the client.

Taking the obligation to provide certain professional services, the auditor must be confident in his competence in this area, have the necessary amount of knowledge and skills in order to fulfill obligations in good faith and professionally, guarantee the client audit services based on modern methods using all, including the latest regulations.

The auditor is obliged to refrain from providing professional services that go beyond his competence, and also do not correspond to his qualification certificate.

The audit firm can attract competent specialists to help the auditor in solving specific tasks.

106 Section I. Theoretical Foundations of Auditing

The professional competence of the auditor is based on general and special higher education, passing certification exams, confirmed by appropriate diplomas and certificates, as well as on the experience of continuous practical work for the provision of professional audit services in conjunction with other specialists of this profile and professional level.

The auditor is obliged to strive to carry out his professional activities in a team of specialists, organizationally united in an audit firm.

The auditor is obliged to constantly update his professional knowledge in the field of accounting, taxation, financial activity and civil law, organization and methods of audit, legislation, Russian and international norms, and; accounting and auditing standards.

The audit firm is obliged to conduct annual training of auditors in the amount of at least 40 teaching hours with the obligatory annual control of knowledge of new norms and regulations that have arisen in the professional audit activity.

To ensure the quality of professional services, the auditor must strictly follow Russian and international auditing standards.

Confidential information of clients. The auditor is obliged to keep confidential information in the affairs of clients, obtained in the provision of professional services, without a time limit and regardless of the continuation or termination of direct relations with them.

The auditor should not use the client's confidential information, which became known to him during the performance of professional services, for his own benefit or for the benefit of any third party, as well as to the detriment of the interests of the client.

Publication or other disclosure of confidential information of clients is not a violation of professional ethics in the following cases:

a) when it is done with the permission of the client, as well as taking into account the interests of all parties that it may affect;

b) when it is provided for by legislative acts or decisions of the judicial authorities;

c) to protect the professional interests of auditors in the course of a formal investigation or private proceedings conducted by managers or authorized representatives of clients;

d) when the client unintentionally and unlawfully involved the auditor in actions that are contrary to professional standards.

Chapter 5. Auditor Certification and Ethics 107

The auditor is responsible for maintaining confidential information by assistants and all firm personnel.

Tax relations. Auditors are obliged to strictly comply with tax legislation in all aspects: they must not knowingly hide their income from taxation or otherwise violate tax legislation in their own interests or in the interests of others.

When providing professional taxation services, the auditor is guided by the interests of the client. At the same time, he is obliged to comply with tax laws and must not facilitate falsifications in order to evade the client from paying taxes and deceive the tax service.

The auditor is obliged to inform the client's administration and the audit commission of the joint-stock (business) company in writing about the facts of violation of tax legislation, errors in calculations and payment of taxes revealed during the mandatory audit and warn them about the possible consequences and ways of correcting violations and errors.

The auditor is obliged to provide advice and advice in the field of taxation to the client only in writing. At the same time, he seeks not to reassure the client that his recommendations exclude any problems with the tax authorities, and must also warn the client that the responsibility for the preparation and content of tax returns and other tax reporting lies with the client himself.

Professional service fees. The fee for the professional services of an auditor meets the standards of professional ethics if it is paid depending on the volume and quality of the services provided. It may depend on the complexity of the services provided, qualifications, experience, professional authority and the degree of responsibility of the auditor.

The amount of payment for professional services of auditors should not depend on the achievement of any specific result or be conditioned by other circumstances than those mentioned.

The auditor has no right to receive payment for professional services in cash in excess of the generally established calculation standards.

The auditor must refrain from paying or receiving commissions for the acquisition or transfer of customers or the transfer of third party services to anyone.

The auditor is obliged to agree in advance with the client and fix in writing the conditions and procedure for payment for his professional services.

The auditor is not obliged to announce in advance the prices for the services rendered.

108 Section I. Theoretical Foundations of Auditing

Doubts about the observance of professional ethics are caused by the situation when the payment of one client makes up all or most of the annual revenue of the auditor for the rendered professional services.

Relationship between auditors. Auditors are obliged to treat other auditors benevolently, refrain from unjustified criticism of their activities and other deliberate actions that cause harm to colleagues in the profession.

The auditor should refrain from disloyal actions towards a colleague when replacing the auditor by a client, assist the newly appointed auditor in obtaining information about the client and the reasons for replacing the auditor.

The newly appointed auditor is informed in writing in compliance with ethical confidentiality standards.

The newly invited auditor, if such an invitation is not made based on the results of a competition held by the client, before agreeing to the offer, is obliged to send a written request to the former auditor and make sure that there are no professional reasons for refusing it.

A newly invited auditor who has not received a response from the previous auditor to his request within a reasonable time and, despite the efforts made, who does not have any other information about the circumstances that hinder his cooperation with this client, has the right to give a positive response to the proposal received.

The auditor has the right, in the interests of his client and with his consent, to invite other auditors and other specialists to provide professional services. Relations with other auditors (specialists), hired additionally, must be businesslike and correct.

Auditors (specialists) who are additionally involved in the provision of services are obliged to refrain from discussing with the client's representatives the business and professional qualities of the main auditors, to show maximum loyalty to the colleagues who have invited them.

The relationship of employees with the audit organization. Certified auditors who agree to become employees of an audit firm are obliged to be loyal to it, to contribute to the authority and further development of the firm in all their activities, to maintain business, friendly relations with managers and other employees of the firm, managers and client personnel.

The relationship between employees and the audit firm should be based on mutual responsibility for the performance of professional

Chapter 5. Auditor Appeals and Ethical Standards 109

zonal responsibilities, dedication and impartiality, continuous improvement of the organization of audit services, their professional content.

An audit organization is obliged to develop methods of professional activity, to generalize regulations, to supply their employees with them, to constantly take care of improving their professional knowledge and qualities.

Auditors cooperating in an audit firm are obliged to do their job in good faith, to constantly improve professionally, carefully and balanced approach to the content of documents sent to clients, and in relations with them be guided by the professional norms and interests of the firm.

A certified auditor who often changes audit firms or suddenly leaves it and thereby causes certain damage to the firm violates professional ethics.

Professionals who have moved to another audit firm are obliged to refrain from condemning or praising their former managers and colleagues, from discussing with anyone the organization and methods of work in the previous firm; must not disclose confidential information and documents of the audit firm with which they have terminated their employment.

The managers (employees) of the audit firm refrain from discussing with third parties the professional and personal qualities of their former employees and colleagues, unless these former employees have caused significant damage to the profession and legitimate interests of the firm by their actions.

At the request of the head of the audit firm in which the auditor is employed, the head of the audit firm, of which the auditor was previously an employee, can give a written recommendation indicating the professional and personal qualities of the auditor.

An auditor who, for one reason or another, leaves the audit firm, must, in good faith and in full, transfer to the firm all the documentation and other professional information he has.

Public information and advertising. Public information about auditors and advertising of audit services can be presented in the mass media, special editions of auditors, in address and telephone directories, in public speeches of 11 other publications of auditors, managers and employees of audit firms.

110 Section I. Theoretical Foundations of Auditing

There are no restrictions on the place and frequency of the advertisement, the size and design of the advertisement.

Advertising of audit professional services should be informative, direct and honest, with good taste, and exclude any possibility of deceiving or misleading potential clients or inciting them to distrust other auditors.

Advertisements and publications containing:

a) a direct indication or hint that instills unreasonable expectations (confidence) of clients in the favorable results of professional audit services;

b) groundless self-praise and comparisons with other auditors;

d) information that may disclose confidential data of the client or biasedly misrepresent him;

e) unfounded claims to be a specialist in a certain field professional activity;

f) information aimed at misleading or putting pressure on judicial, tax and other state bodies.

Auditors are obliged to refrain from participating in various kinds of comparative studies and ratings, the results of which are supposed to be published for general information, or from paying for the services of journalists publishing favorable information about them.

Auditor's actions incompatible with professional activities. The auditor should not, simultaneously with the main professional practice, engage in activities that affect or may affect his objectivity and independence, observance of the priority of public interests or the reputation of the profession as a whole and therefore is incompatible with the provision of professional audit services.

Engaging in any activity that is prohibited for auditor practitioners in accordance with the law is considered an incompatible conduct of the auditor that violates the law and professional ethical standards.

The auditor performing two or more professional services and assignments at the same time may be considered incompatible.

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Auditing services in other states. Regardless of where the auditor provides professional services, in his own country or elsewhere, the ethical standards of his conduct remain unchanged.

To ensure the quality of professional services provided in other states, the auditor is obliged to know and apply in his work international auditing standards and standards in force in the country in which he carries out his professional activities.

Self-test questions

1. What are the requirements for the education of an auditor when passing exams for obtaining a certificate of a professional auditor?

2. Give a brief description of the position on the certification of auditors.

3. How are the exams for the certificate of a professional auditor conducted?

4. Give the main criteria for the independence of the auditor or audit organization.

5. Give a list and description of the main ethical standards of auditing.

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By Russian laws there is a certain list of rules, norms, restrictions that are guided by professional inspectors:

• honesty, conscientiousness;
• independence, lack of personal interest;
• competence, professional approach;
• confidentiality, keeping the secrecy of verification;
• professionalism - objectivity, education, skepticism.

The fundamental ethical principles of auditing are set out in the company's charter, as well as in the documents of associations and self-regulatory organizations. In today's business climate, it is very important to maintain high personal qualities, which guarantee customers a complete result, based on real facts.

For the most part, the ethical standards of auditor behavior are determined not so much regulations how much the structure of the company, personal ideas of nobility and professionalism.

Audit Code: General Conditions

When ordering an audit of assets and finances, the owners of enterprises, companies, firms pay attention to the basic rules of auditors' work. This is the preservation of the secrecy of information, independence, professional skepticism and the training of specialists. Each of the points is intended to guarantee the high quality of the research carried out:

• confidentiality - aims to ensure the preservation of the results of the audit from the public and government agencies, unless otherwise indicated for the purpose of the audit. For most owners, data on the financial, property, and commercial status of the company is a secret that should be kept;
• unbiasedness is a clause that prohibits auditors from taking part in the audit if they have a personal or property interest in the target company. the same goes for their relatives. In fact, a specialist and a customer should be bound only by a service agreement;
• skepticism and objectivity - the combination of these points is justified by the fact that the inspector must always perceive information from different angles in order to get the maximum result, to guarantee the accuracy of his work;
• preparedness of the auditor - the specialist must have the necessary theoretical and practical skills; know Russian and international legislation; use new legislation, accounting rules.

Professional audit ethics at Hold-Invest-Audit

A company working for domestic market more than ten years, guarantees compliance with all rules, ethical, professional norms when conducting an inspection at the enterprise. The rules of work are clearly spelled out in the charter of the company and must be specified when concluding contracts. The customer always knows that he can entrust any information to the specialists of "Hold-Invest-Audit".