Question

Consider the concepts of independence and “whistleblowing” in relation to auditors. How do these concepts relate to the public interest requirements mentioned in the APES 110 Code of Ethics for Professional Accountants document? (300 - 400 words)

Answer 1

The concept of auditor independence and “whistleblowing” are salient attribute of the profession as well as significant part of accounting ethics, governing the accounting profession. An auditor independence states than an auditor will highlight any misstatements and breaches in the financial statements when discovered. Thus, a vital feature of professional and ethical commitment in auditing is referred to as independence commitment. Independence commitment will have a direct and positive effect on whistle-blowing intentions among external auditors. The whistle-blowing intentions are usually influenced by the degree of independence commitment an auditor possesses. Whistle-blowing can be referred to policies that allows employees are required to report any unethical violations if discover or see in the firm. A whistleblower is a person who exposes any sort of activity or information that is deemed unethical, illegal, or not correct within an organization that is either public or private. It creates loyalty and sense of commitment to the organisation and job description.

APES 110 Code of Ethics for Professional Accountants document is issued by the Accounting Professional and Ethical Standards Board (APESB). APES 110 state that the nominated incoming auditor must request the client's permission for communicating with the previous auditor. In case the client denies permission, normally decline nomination. If permission is granted, the nominated auditor asks the previous auditor in writing for all the necessary information to make a decision on whether nomination should be accepted. It was enacted with a goal to protect whistleblowers who work for the government and report misconduct of the agency. This ensures the freedom of speech for the contractors and workers in particular situations. Whistleblowers holds the right to file complaints that they believe are reasonable evidences of a violation of a rule, law, or regulation; gross waste of funds; an abuse of authority; gross mismanagement; or a substantial and particular danger to public health or safety