What is the link between professional ethics and legal liability?

Expert Solution

Answer :

Professional Ethics : Professional ethics are principles that govern the behaviour of a person or group in a business environment. Like values, professional ethics provide rules on how a person should act towards other people and institutions in such an environment.

Ethical principles

Ethical principles underpin all professional codes of conduct. Ethical principles may differ depending on the profession; for example, professional ethics that relate to medical practitioners will differ from those that relate to lawyers or real estate agents.

However, there are some universal ethical principles that apply across all professions, including:

honesty
trustworthiness
loyalty
respect for others
adherence to the law
doing good and avoiding harm to others
accountability.

Legal Liability : The external auditor must exercise due care when conducng an audit. This means that the auditor must be diligent in applying technical and professional standards, and document each stage in the audit process.If the auditor is found to be negligent (to have not exercised due care) they may be sued for damages bytheir client or a third party. Under tort law, to prove that an auditor has been negligent it must be established that:

 Establish that a duty of care was owed by the auditor

 Prove that there was a breach of the duty of care

 A quan (able loss was su6ered as a consequence of that breach.

 Prove that the quan (able loss was caused by the breach of duty of care.

ekkarill92 answered 1 year ago

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