...Ethics, Compliance Auditing, and Emerging Issues INTERNAL MEMO TO: John Doe CEO FROM: Glen Leonard RE: Ethics Program / Training /Compliance Auditing ------------------------------------------------- DATE: February 22, 2016 This memo serves as notice that we will soon initiate efforts to develop and implement an ethics program as well as the appropriate training and an effective way to monitor those plans. As you are aware, consumers and partners want to work with companies they can trust, and having a program that will build management skills and effectively structure business controls is a great way to become transparent and build that trust. Overall, an effective ethics and compliance program will protect the organization by identifying and preventing inappropriate conduct while promoting adherence to the legal and ethical responsibilities of the organization. The core components of the proposed ethics program will include: * Establishing Standards and Procedures – this will include code of conduct, policies and procedures * Training and Education, to ensure employees are trained on the code of conduct, policies and procedures and other programs and objectives that are relevant to the program * Monitoring, Auditing and Evaluation establishing a system to detect and prevent unethical conduct and to ensure the system is effective and being adhered to. To close, with the establishment of an effective ethics programs...
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...Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike There have been numerous issues that have affected the Nike Company since the 1990’s. Nike to save money on the production of their products moved their production to China, when the cost started rising, they decided to move again into other areas of Asian. Many of the ethical issues that faced Nike were Child labor law violations as well as human rights. The Nike Company has been accused of poor working conditions as well as harassing and abusive behaviors to their workers. Nike uses Asian companies that subcontract the work to others, because of this Nike was unable to see what was happening in their plane. Had Nike had a better system of knowing what was going in there production facilities they would have seen what was happening and been able to put a stop to it. Had the Nike company implemented contracts with these companies that stated “Contractors with suppliers must eliminate child labor from all activities as well as the subcontractors that they may use” (What you can do, 2013). In 2007 Nike Company once again was faced with another problem discrimination, This suit was filed by black employees, in which they questioned Nike's managerial practices as against the black community, this lawsuit went into litigation and was settled, however that damage was done and Nike was once again took another hit to their reputation. This could...
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...Ethics Audit Framework Essay # 3 Stephen Randall Texas A&M University – Central Texas Professor: Marshell J. Silva Ethics Auditing Ethics auditing by definition, an ethics audit is a “systematic evaluation of an organization’s ethics program and/or performance to determine its effectiveness.” This concept of ethics auditing is fairly new and few companies have conducted an ethics audit. However, performing such audits will likely become more mainstream as recent legislation encourages greater ethical accountability for companies to demonstrate they are abiding by the law and have established programs to improve their ethical decision making. The U.S. Sentencing Commission (the “Commission) has amended the Federal Sentencing Guidelines for Organizations (“FSGO”) whereby an effective compliance and ethics program must “exercise due diligence to prevent, detect, and report criminal conduct and otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with all applicable law." The Commission noted there are seven minimum requirements of an effective ethics program, standards and procedures to prevent and detect criminal conduct; Responsibility at all levels of the program, together with adequate program resources and authority for its managers; Due diligence in hiring and assigning personnel to positions with substantial authority; Communicating standards and procedures, including a specific requirement for training...
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...Business Research and Ethical Issues in Independent Auditing Te’ Portia Sibley RES 351 John Gilpin Jan, 22, 2014 The role of an auditor is to audit with integrity and objectivity. In an essay by Roger D. Martin, the role of an auditor should expand to assess the integrity and ethical values of their client as well. The purpose of this research was to bring to light how the auditor-client relationships could devolve into questionable behaviors. This article is in response to the regulations of the Sarbanes-Oxley act of 2002, that an independent auditing firm be contracted to audit a company in compliance with the Generally Accepted Accounting Practices. Prior to the act, company management hired the auditing firm, negotiated the fee and could request the firm perform other services. The Sarbanes-Oxley Act requires that an audit committee of the company’s Board of Directors hire the auditing firm with restricted duties. The researcher concludes that an auditor could and should be trained to understand ethics and how it influences behavior. This is a tool auditors could use to assess the integrity and ethical values of clients and better understand the ethical infrastructure (organizational elements that contribute to an organizations ethical effectiveness) of an organization. What unethical research behavior was involved? The article discusses how auditors maintain integrity and fulfill their responsibilities independently. Auditors should be aware of risks when dealing...
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...Human Resource Management 522 Ethics and Advocacy for HR Pro March 13, 2012 Discern how a more effective ethics programs and a more viable code of conduct could have mitigated the ethical issues faced by Nike Nike leads the world in the manufacturing and distributing of its athletic footwear and accessories. Nike is the brain child of Phil Knight and his former track coach, Bill Bowerman. The duo formed a company that would eventually become the leader in the athletic industry with the sales and manufacturing of athletic wear. The Nike brand is widely recognized by its catch phrase and its logo. Their marketing campaigns specially “just do it” helped it revive its brand image. The swoosh sign is recognizable across most of the world. This alone attributes for Nike's worldwide success. Overall, Nike keeps improving its product which helps to keep the population engaged with its brand. If Nike had a more effective ethics program and viable code of conduct, ethical issues could have been avoided by Nike. In the early 1990s, sports shoe giant Nike became the target of arguably the most intensive and widely publicized of these anticorporate campaigns up to that time (Conaway, 2011). According to Ferrell, ethics programs that provide guidelines outlining board responsibilities encourage compliance encourage compliance at the highest levels of the organization. Some of the minimum requirements for ethics and compliance programs are standards and procedures...
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...------------------------------------------------- RE: Standards of Conduct and Ethics I. Purpose This Code of Business Conduct and Ethics helps ensure compliance with legal requirements and our standards of business conduct. All employees of Q Company are expected to read and understand this Code of Business Conduct and Ethics, uphold these standards in day to day activities, comply with all applicable policies and procedures, and ensure that all agents and contractors are aware of, understand and adhere to these standards. In any employment relationship, management and staff have expectations of each other and an effective and productive working relationship depends on the fulfillment of these expectations. Our Standards of Conduct and Ethics are driven by the Q Company which provides the fundamental direction on what type of organization we aspire to be and in guiding our behavior. Our Standards of Conduct and Ethics provide a framework for our behavior, the way we conduct business and the way we interact with each other. As a Q Company employee, you must conduct yourself in a diligent and professional manner, with due regard for the safety, security and integrity of the facility in which you work and well-being of everyone in the facility. It is neither possible, nor desirable to write prescriptive policies for every situation we may face at work. The standards are general in nature and are not intended to advise in detail the appropriate behavior for every...
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...[pic] SCHOOL OF ACCOUNTANCY COLLEGE OF BUSINESS UNIVERSITI UTARA MALAYSIA COURSE CODE : BKAA3023 COURSE NAME : AUDITING AND ASSURANCE II PRE-REQUISITE : AUDITING AND ASSURANCE I _____________________________________________________________________ 1. SYNOPSIS This is a continuation of Audit and Assurance 1. It intends to strengthen and enhance the students’ understanding in auditing. Among the topics that will be discussed are code of ethics, auditors’ liability and in-depth explanations on analytical procedures, computer assisted audit techniques, audit sampling, materiality and audit risk, group audit and current issues facing the auditing profession. This course will justify other activities than financial statement audit that can be performed by a public accountant like performance/operational audit, internal audit and compliance audit. 2. COURSE OBJECTIVES This course intends the student: 1. To comprehend applicable regulations, legal responsibilities and ethical standards and current issues facing the audit profession. 2. To appreciate the concepts of internal control system and the use of computer assisted audit techniques in auditing a computerised environment. 3. To understand and apply audit risk, materiality, and statistical and non statistical audit sampling techniques. 4. To be familiar with related issues in audit completion, group audit, internal audit and related audit services and other services that...
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...organisations has created the need for a specialist in various business controls: the internal auditor. We can understand better the nature of internal auditing today if we know something about the changing conditions in the past and the different needs these changes created. What is the earliest form of internal auditing and how did it come into existence? How has internal auditing responded to changing needs? As the operations of an organisation become more voluminous and complex, it is no longer practicable for the owner or top manager to have enough contact with all operations to satisfactorily review the effectiveness of performance. These responsibilities need to be delegated. The Development of the Profession of Internal Auditing Internal auditing has evolved from accounting-oriented to a management-oriented profession. At one time, internal auditing functioned as a junior to the independent accounting profession, and attesting to the accuracy of financial matters was the profession's main concern. Now internal auditing has established itself with a far broader focus. Modern internal auditing provides services that include the examination and appraisal of controls, performance, risk and governance throughout public and private entities. Financial matters represent only one aspect of the purview of internal auditing. Requirement to have Internal Audit Activity In January 2004, the US Securities and Exchange Commission (SEC) had approved new rules proposed...
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...Payal Mehta ACC416 October 1, 2013 Auditing Research Paper The profession of auditing plays a very important role in our economy especially after Congress passed the Sarbanes-Oxley Act its role in the economy was greatly solidified. Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person. “The auditing profession offers a wide range of employment opportunities for new accountants. Most accounting firms offer client services in three areas: auditing, tax, and consulting. A new accountant might be hired to work in any of these areas. In the audit area, the accountant may work for a variety of clients including private or public companies, clients in banking, insurance, manufacturing, technology, retail, health care, or government. Individuals working in the audit area may also spend most of their time providing internal audit services to clients rather than working as an external auditor. Working in any of the areas in an accounting firm may be one of the most demanding jobs, but it is also one of the most interesting, exciting experiences and a great way to prepare to work in the corporate business world.” “What is Auditing?” Web. 29 September 2013 Accounting is the recording, classifying, and summarizing of economic events in a logical manner...
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...Cambodia ACCOUNTING AND AUDITING May 15, 2007 Contents Executive Summary Preface Abbreviations and Acronyms I. Introduction II. Institutional Framework III. Accounting Standards as Designed and as Practiced IV. Auditing Standards as Designed and as Practiced V. Perception of the Quality of Financial Reporting VI. Policy Recommendations EXECUTIVE SUMMARY This report provides an assessment of accounting and auditing practices within the corporate sector in Cambodia with reference to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and the International Standards on Auditing (ISA) issued by the International Federation of Accountants (IFAC). This assessment is positioned within the broader context of the Cambodia’s institutional framework and capacity needed to ensure the quality of corporate financial reporting Cambodia is putting in place an institutional framework with regard to accounting, auditing, and financial reporting practices. However, institutional weaknesses in regulation, compliance, and enforcement of standards and rules still exist. The accounting and auditing statutory framework suffers from inconsistencies among different laws. Although the national accounting standards and auditing standards are based on IFRS, and ISA, respectively, they appear outmoded and have gaps in comparison with the international equivalents. There are varying compliance gaps in both accounting and auditing practices. These gaps...
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...Hence, inspection of accounting procedures makes it more treatable in case of errors that can impact the company and audit client. But the threat of SPEs (special purpose entities) displays some manipulation from the part of the audit firm that also with prior knowledge of accounting ethics, which at most times makes it more risky, given the legal involvement. Lastly, manipulations are also likely to occur as the biggest threat in the audit consultancy services. So, professional ethics are likely to arise. Hence, self-governance is largely a matter that can pose greater risk. When it matters to preparation and retention of audit work paper, the requirement prepare by auditor should be in a manner that it helps the auditors to carry out auditing services in the most appropriate way. Hence the working paper requirement at most should avoid accumulating unnecessary working papers for the sake of client and for the requirement of professional auditing standards. When it comes to the ownership of audit work paper and as with the general principles, audit paper is the property of the auditor concerned in all circumstances. However, the auditor and the audit paper are also subject to some compliance. Hence, in the first instance audit firm own audit...
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...instability and the compromising factor of accounting profession itself. Out of the many parties in the league and the major force behind the debacle of Enron concern Andersen's, the accounting and auditing firm that once deserved name in the industry for its conscience in accounting professional services and auditing. As the case relates to, accounting audit for Enron is attended by Andersen's since long enough. However, the interesting feature is that some compromise in the profession of accounting services by Andersen's was notable, given that there are noteworthy feature of stock manipulation, especially in financial statements of Enron attended and audited by Andersen's. The statement and restatement of Enron also gives some probable indication for manipulation of accounting, where debate and counter debate in that regard from the prying eye of the media was a common feature. Thus, the involvement of Andersen's in Enron consultancy and professional auditing makes it rather more imploded for the direct involvement of Andersen's that also successively ushered the debacle and bankruptcy of Enron for the entire sheer element attached to it. Moreover, the accounting scandal involving Enron have been subject to criticism from many quarters. However, insiders who testify against the auditing firm make it the biggest party of the fall out and bankruptcy of Enron...
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...The Sarbanes-Oxley Act of 2002 (often shortened to SOX) is legislation enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. The act is administered by the Securities and Exchange Commission (SEC), which sets deadlines for compliance and publishes rules on requirements. Sarbanes-Oxley is not a set of business practices and does not specify how a business should store records; rather, it defines which records are to be stored and for how long (www.searchcio.techtarget.com). The legislation not only affects the financial side of corporations, it also affects the IT departments whose job it is to store a corporation's electronic records. The Sarbanes-Oxley Act states that all business records, including electronic records and electronic messages, must be saved for "not less than five years." The consequences for non-compliance are fines, imprisonment, or both. IT departments are increasingly faced with the challenge of creating and maintaining a corporate records archive in a cost-effective fashion that satisfies the requirements put forth by the legislation (www.searchcio.techtarget.com). The intent of the Sarbanes-Oxley Act was to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. The Sarbanes-Oxley Act created new standards for corporate accountability...
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...Business Ethics: Ethical Decision Making and Cases Dr. Mary Tranquillo November 13, 2012 Arthur Andersen: Questionable Accounting Practices p1 Arthur Andersen, one of the largest accounting firms in the United States, “a name that was synonymous with trust, integrity, and ethics” (Ferrell, Fraedrich, & Ferrell, 2011, p. 348), through a loss of its founder Arthur Andersen, and change in its corporate culture resulting in many unethical business transactions that affected multitudes of primary stakeholders had to close its doors in 2002 after 90 years of business. Review the mandated requirements for legal compliance (from chapter 4) and determine which requirements apply to the Arthur Andersen case. Explain your rationale After re-reading Chapter 4 there are five areas that separate the mandated requirements for legal compliance, and I feel the that two apply to the Arthur Andersen case; the protection of consumers, and incentives to encourage organizational compliance programs. In the laws that protect consumers they require businesses to provide accurate information protecting them from financial scams, unfair, fraudulent, or deceptive practices. There are “Gatekeepers” that are in charge of that such as lawyers, financial rating agencies, and financial reporting services that help enforce high ethical standards. This was the issue wan Andersen as there were no such “Gatekeepers” or compliance programs...
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...How Sarbanes-Oxley Has Impacted the Auditing Profession Auditing (BME-214024-02-11FA1) Table of Contents Introduction 3 Internal System and Process Collaboration Is Critical For SOX Compliance 3-5 Analyzing SOX by Section to Assess the Impact on Auditors: Section 302 5 Section 404 5-6 Section 409 6-7 Section 802 7 SOXs’ Impact on the Audit Profession 7-8 Conclusion 8-9 References 10 Introduction In the past decade or so government-mandated compliance legislation within the auditing profession, such as the Sarbanes-Oxley Act of 2002, has created a significantly greater amount of opportunities for providing services. However, it has also introduced an entirely new and higher level of complexity as a result. In this paper I will evaluate how the Sarbanes-Oxley Act has and is continuing to influence the auditing profession, specifically concentrating on how the advantages and disadvantages of the Sarbanes-Oxley Act are impacting this profession today and in the future. Although Governance, Risk and Compliance has grown significantly as a framework for ensuring corporate-wide compliance with government-based reporting and auditing, there is still a considerable gap between actual auditing practices and performance to standards (Jelinek, Jelinek, 223). The lack of internal controls over the auditing process has created significantly more work for companies to ensure...
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