Auditor's Integrity and Ethics in Finance: Needs For Everyone plc Case

This case study delves into the ethical dilemmas faced by auditors at 'We For You Plc' while auditing 'Needs For Everyone plc.' The case revolves around Mary Kieth, an auditor who discovers a suspicious transaction related to a non-current asset. Her senior, Milona, dismisses the issue, raising questions about his integrity and adherence to APES 110. The study further examines the ethical responsibilities of David, a partner and training manager, who is aware of the situation but hesitant to act. The analysis explores the ethical implications of their actions, the potential conflicts of interest, and the available alternatives for upholding auditor integrity and ensuring accurate financial reporting. The document highlights the importance of ethical conduct in auditing and the potential consequences of failing to address irregularities.

Running head: AUDITOR’S INTEGRITY AND ETHICS
AUDITOR’S INTEGRITY AND ETHICS
Name of the Student:
Name of the University:
Author Note

1AUDITOR’S INTEGRITY AND ETHICS
Table of Contents
Answer to Question 1: -.............................................................................................................3
Answer to Question 2: -.............................................................................................................3
Answer to Question 3: -.............................................................................................................4
Reference....................................................................................................................................6

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Answer to Question 1: -
Integrity is one of the characteristic of the auditor which can be defined as having the
basic standard, moral and ethics. The auditor with the integrity means that the auditor is fair,
honest and abide with the regulation and laws. The integrity in audit means way of analysing
and examine that the firm is operating in the honest and fair way as well as the firm must
follow all the ethical standards in their operation (Yuan and Yu 2015).
In other words, the audit integrity is critical to the well – being of society and the
records that are generated as a result of audits conducted. The auditor must complete the audit
in the fear and true way and with the ethics as well as the auditor must not perform any such
activity which is unethical and out of the auditor’s code of conduct during the audit process
of any firm.
In the provided case the May Kieth highlighted an irregularity related to the non –
current asset of the Needs For Everyone plc. May Kieth, discover that there is a transaction
entry of 100,000 for the security system which is for the Needs For Everyone plc’s holiday
cottage that does not have any link with the firm. The further, investigation of May reported
that there is some issue related with this entry. Hence, accordingly, May reported the same
issue to her Senior Milona but he asked May to forget about that and focus in the other
auditing part (Rodgers and Al Fayi 2019). This incident is the biggest integrity issue in the
given case study. Here, Milona does not properly investigated the case highlighted by the
May. Here, the code of integrity as he defended the inappropriate activity of the firm which is
not the work of an auditor as the work of auditor to ensure that company must operates and
present their financial report in such way which is fair, true and as per the standards, law and
regulation.

3AUDITOR’S INTEGRITY AND ETHICS
Answer to Question 2: -
The fundamental principles of professional ethics as per the APES 110 includes that
the auditor must have the further stated characteristics. Those are Integrity, Objectivity,
Professional competence and due care, confidentiality and professional behaviour (Auasb
2019). The auditor must have the above stated characteristic to perform their duties. Though,
in the given study the auditor disqualified in the various characteristics of the auditor. Here,
in the given case study, Mary Kieth who audited the non – current asset of the Needs For
Everyone plc, honestly highlighted the irregularity, hence she properly performed her duty
with having the characteristics of the auditor (Hottegindre, Loison and Farjaudon 2017). As
she not only properly highlight the misconduct of the firm related to the current asset but also
invested the case to reach the main aspect of this irregularity.
Now the second aspect of the given case study, when Mary Kieth, discuss the
identified issue in the book of account of the Needs For Everyone plc, with her senior named
Milona then told that the matter was now closed and that she should concentrate on her next
audit and her studies (Jiang, Chen and Ma 2015). Here, the Milona who is the senior auditor
does not have the proper characteristics of an auditor. As Milona closed the irregularity in the
account without investigating further which is out of the integrity of the auditor. Secondly,
there must be a chances that the Milona may also have some hidden deal with the Mr
Richards who is the managing director of the firm to close the highlighted issue this is against
the ethics of the auditor. Hence, the Milona disqualifies in having the characteristics of
auditor as well as their friendship with David is also non - professional.
Answer to Question 3: -
David who is the partner and the training manager at We For You Plc., have the
ethical dilemma. As David was aware about the issue highlighted by the Mary Kieth as well
as the incident which took place in between the Mary and Milona but he does not take any

4AUDITOR’S INTEGRITY AND ETHICS
action regarding the issue (Garg and Bawa 2016). The alternative that David has in such
dilemma are stated further.
Here, the first alternative or the duty of the David was to properly talk with the Mary,
and get all the information regarding irregularity in the financial transaction of the Need For
Everyone and accordingly take further action (Liu and Ren 2017).
Secondly, when David comes to know about the conversation happen between Mary
and Milona, then he should once talk with Milona and ask him to let the Mary complete her
investigation as well as help her in further investigation as she can get the root of the material
misstatement performed by the Robert, the financial controller of the Need for Everyone Plc.
in the financial report of the firm.
Lastly, David can start he own investigation to find the root of the case as well as the
main reason behind closing the case by Milona, forgetting that Milona is his good friend. He
also keep the Mary in his side and support her for the further examination.
The above are the three alternatives which can be performed by the David in the
current ethical dilemma. As the ethics of the auditor as per the APES 110 the auditor must
perform the audit of any firm free of any interest, fairly and in the true way. The ethical
responsibility of the auditor to examine that the firm must present and report their financial
activity in such way which is true, fair and free of any material misstatement (Lai et al 2018).
Though here, in the given case study both the senior auditor is failed in performing the audit
of the Need for Everyone Plc. as they are not analysing the accounting fraud highlighted by
the Mary as well as settled the case without any investigation.

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Reference
Auasb 2019. [online] Auasb.gov.au. Available at:
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