Business Ethics and Management: Ethical Issues, Audit, and Services

This report delves into the realm of business ethics and management, addressing key ethical concerns within the business environment. It begins by identifying and explaining ethical issues, such as auditor independence, and proposes measures to mitigate these issues, including establishing ethical policies, implementing strict clauses in company procedures, and adhering to auditing standards. The report then transitions to a case study involving a statutory audit of Gulf Travel, emphasizing the need for risk and IT assessments. It highlights the challenges faced by an auditing firm with limited experience in the travel sector, while also stressing the importance of ethical standards in presenting a tender. The report concludes by discussing the provision of other services, such as IT services auditing and risk assessment, and underscores the significance of the auditing company's experience in financial and risk management to ensure success. Overall, the report emphasizes the need for ethical practices in the business world.

Running head: BUSINESS ETHICS
Business ethics and management
Name of the student
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Table of Contents
Task 1.........................................................................................................................................3
Identification and Explanation of the Ethical Issues..............................................................3
Measures to be implemented by the business firm................................................................3
Task 2.........................................................................................................................................4
Statutory Audit of Gulf Travel...............................................................................................4
Provision of other Services....................................................................................................5
References and Bibliography.....................................................................................................7

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Task 1
Identification and Explanation of the Ethical Issues
According to, Bowie (2017) it is one of the most common practices in the modern
business environment that Auditors are often offered different positions in the client firms.
There has been a number of different kinds of examples where a large number of people
working as auditors for a certain company have switched over to the client companies.
According to, Ferrell and Fraedrich (2015) this switchover often leads to a number of
financial scandals where the client companies uses the auditors to project misleading and
wrong reports to gain extra funding and mislead the investors and stakeholders of the
company . The case of Enron can be cited here in this case as such kind of financial scandals
took place as a result of employing the auditors by the client firms.
The study here has shown the same kind of the problems as a former employee of the
auditing firm who had been the auditor of ABC mart has been appointed by the management
of ABC. The following area raises serious concerns and directly presents ethical concerns for
the organization. The first major problem that will rise in such a case will be the problems of
the auditor independence (Bowie 2017). The auditor independence will be directly threatened
as the auditor may use his experience to obtain manager roles. The auditor may use his power
to carry out illegal tasks. Apart from this, the auditor can also use illegal means to present a
completely different report that will invite financial trouble for the organization (Houdek
2019). Therefore it can be said that the appointment of the former auditor is a great problem
as it clearly violates the different ethical policies and standards of the modern business world.
Measures to be implemented by the business firm
There are different kinds of measures that can be implemented by the management of
the business in order to address the different issues with the business firm. The issues will be

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addressed through the means of the proper implementation of certain policies that needs to be
maintained in a strict manner. Some of the measures that needs to be implemented includes;
a. The ethical policies must be created in a proper manner in order to ensure the absence
of any switchover of the auditors to the client companies
b. The application of strict clauses to the company policies and procedures to ensure the
success of the business in a proper and efficient manner.
c. Rule 3100 to be implemented in order to comply with the auditing and related
professional practice standards
d. The implementation of the Rule 3101 that will ensure the presence of the
unconditional responsibility from the part of the auditors
e. The mandatory responsibility for securing the services of the auditors by means of the
auditing standards. The preparation of the audit report must be done by the persons
who are legally bound to not undertake any posts under the client companies
f. Other amendments and policies and procedures can ensure success and meet all the
different criterions of the ethical standards
Task 2
Statutory Audit of Gulf Travel
The current case study shows the need for a statutory audit including that of the risk
assessment and IT assessment for Gulf Travel. The new statutory audit system requires an
additional IT measurement to address the latest technological needs of the company to
smoothly operate as a travel agency. The major problem for the auditing company here
includes the inexperience of auditing for travelling companies. The absence of a proper
experience in the travel and tourism market will prove to be a major setback for the company.
The management of the organization will have to rethink on submitting the tender in order to

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present a proper audit report. The statutory audit report is the creation of an audit of financial
statements by the auditors to the financial statement of the auditors. Therefore in order to
submit the tender, the management of the auditing firm needs to ensure its capability. It is
needed for the management of the organization to ensure the presentation of the financial
statements by law and status.
The question of ethics arises here as because it is important for the industry to
maintain the ethical standards in a proper and sustainable manner. The very first ethical
standard that has to be maintained by the company (Crane et al. 2019). It is important for the
auditing company to present the tender and mention about the inexperience of the company in
traveling sector. However, the management of the company must also provide its strong
evidence about its reputation and success rate of auditing other companies. The management
of the company must mention that in case they receive the order, they will appoint the best
experts having proper ideas on tourism auditing to ensure success for the business.
Provision of other Services
The provision of other important services includes the likes of the IT services auditing
and risk assessment auditing. Though the auditing company has less experience in auditing
tourism companies, the experience of the company in financial and risk management auditing
can help in the success of the business in a proper manner. Apart from this it is also important
for the company to provide the It assessment guide to gulf travel which can be easily
presented to them. Thus it is important for the management of the auditing company to
present a clear picture of the auditing experience of the company (Chell et al. 2016). The
quality experience of the auditing company to address the auditing issues can thus act as a
huge source of business success for the company. It is important for the company to assure
the management of Gulf Travel about their experience in the auditing services. The presence
of the ethical standards and the proper implementation of such standards is key to receiving

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the order in this particular case. In the case of the maintenance of the proper standards, the
auditing company will be surely eligible to receive the order from Gulf Travel to prepare the
audit report including the financial, IT and risk assessment of the company.

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References and Bibliography
Bowie, N.E., 2017. Business ethics: A Kantian perspective. Cambridge University Press.
Chell, E., Spence, L.J., Perrini, F. and Harris, J.D., 2016. Social entrepreneurship and
business ethics: Does social equal ethical?. Journal of business ethics, 133(4), pp.619-625.
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases.
Nelson Education.
Houdek, P., 2019. Is behavioral ethics ready for giving business and policy advice?. Journal
of Management Inquiry, 28(1), pp.48-56.
Ojasoo, M., 2016. CSR reporting, stakeholder engagement and preventing hypocrisy through
ethics audit. Journal of Global Entrepreneurship Research, 6(1), p.14.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to
do it right. John Wiley & Sons.