Fundamental Ethical Principles of Auditor

This presentation discusses the five fundamental ethical principles that govern the decisions and ethical behaviour of an auditor during the course of an audit. The principles include integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. Each principle is explained in detail, along with its importance in ensuring the independence and credibility of the auditor. References are also provided for further reading.

Fundamental Ethical
Principles of Auditor

Introduction
The fundamental ethical principles are the principles which governs
the decisions and ethical behaviour of an auditor during the course
of an audit. Any violation to such fundamental principles are
considered to be an threat to the overall scope of audit and also on
the independence of the auditor (Knechel and Salterio 2016). There
are five fundamental principles which are discussed over next few
slides.

Principle of Integrity
 The principle states that accounting professionals and auditors
should have a professional approach towards handling business
decisions.
 In other words, auditor should be straight forward and clear
about every client of the business.
 The principle of integrity not only refers to an honest approach
but also fair dealings and truthfulness in conducting the audit
process.

Principle of Objectivity
 The principle states that auditors should not be influenced by any
circumstances and should carry out the course of audit to best of
ability of the auditor.
 The auditor should not let personal interest, undue influence from
management, biasness to cloud the judgement and thereby the
opinion of the auditor.

Principle of Professional
Competence and Due Care
 As per this principle, the auditor should be competent enough to
conduct the audit. In other words, the auditor should be
professional qualified to be an auditor in order to conduct audit of
a business.
 The principle also relates to the fact that the auditor should have
appropriate knowledge about the process and accounting
standards and principles. In addition to this, the auditor should
posses knowledge about legislations and new amendments to
accounting and reporting framework.
 This principles ensures that the auditor is able to provide the
client with competent services.

Principle of Confidentiality
 As per this principle, the auditor should not disclose any relevant
information about the business of the client to any third party
unless law specifically requires the same (Ardelean 2013).
 This principle protects the important business policies, trade
secrets and information of the client’s business. The auditor
usually document important information in audit working papers.

Principle of Professional Behavior
 The principle states that auditors should abide by the rules,
regulations and laws which apply to the auditing process and
ensure that no discredit is brought upon the profession.
 The principle basically states that the auditor should act in a
professional manner with courtesy with the clients and expect
the same from the clients.

Reference
Ardelean, A., 2013. Auditors’ ethics and their impact on public
trust. Procedia-Social and Behavioral Sciences, 92, pp.55-60.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk.
Routledge.

THANK YOU