Auditors are responsible for ensuring that a company is operating ethically. They do this by analyzing data for accuracy and compliance to policy. Their work is important because there are significant penalties associated with a lack of organizational control, including fines, loss of business and even prosecution. As with any profession responsible for integrity, there are incentives to turn a blind eye to infractions for personal and professional gain.
Failure to Maintain Independence
Auditors are expected to maintain independence from the entity that they are auditing. That is, they should not have any allegiance that may make their objectivity come under suspicion. Therefore, they should not receive gifts or any other perks. If they should become employed by the entity that they are auditing, then their prior work should be held to the highest scrutiny to ensure favoritism was not granted in the auditing process.
Misuse of Materials
Auditors will have access to a lot of company materials, including computer time, fax machines and other business materials. Therefore, they should not misappropriate how they use these materials and should not use them for personal gain.
Avoid Client Advocacy and Pitfalls
Auditors may be asked to go beyond the task of auditing by their clients. They may be asked to provide some consulting information and advocate on behalf of a client. This is frowned upon because this maneuver provides scrutiny due to conflict of interest.
Lack of Full Disclosure of Information
Auditors are expected to fully disclose their findings to both the company they are auditing and their own employing body. This is to ensure that companies are receiving appropriate treatment. This also will denounce auditor subjectivity in the work.
Avoid Familiarity
If an auditor has been with a firm for a long period of time, then his objectivity can come into question. It is mandatory for companies to rotate lead auditors after a period of 5 years.
