TM 8 UTS-TM 9 : Etika Dalam Auditing

Bahan : ch 7 duska / auditing function

MATERI :
Kepercayaan publik,
tanggung jawab auditor
kepada publik, tanggung
jawab dasar auditor,
indepensi auditor, pasar
modal , independensi
akuntan publik
 ETHICS IN AUDITING
• An article entitled “Arthur Andersen’s Double
Duty work raises question about its
independence. AA acting as an outside auditor
also performed internal auditing service
• Accounting firms say the double duty
arrangements let them become more familiar
with clients’ control procedures and that such
arrangements are ethically permissible, as long
as outside auditors don’t make management
decisions in handling the internal audits
• The Enron/AA case raises many ethical
questions about what is appropriate behavior for
auditors
• To increase profit accounting firms add
consulting services, quite often for the same
companies that they are simultaneously
auditing.
• It seems less likely that one will be able to keep
a client on the consulting side if the client is
given an unfavorable audit.
• If accounting is the language of business it is the
auditor’s job to see the language is used
properly so that the relevant message is
communicated properly
• Corporate financial statements are on of
the primary sources of information
available to guide the decisions of the
investing public. This financial reports
must be audited by an independent CPA in
accordance with GAAP.
• The responsibility of the auditor clearly to
issue an opinion as to whether the
financial statement fairly presents the
financial position of the corporation, the
auditor must have integrity and honesty
and as much independence as possible
 The Ethics of Public Accounting
Usually, when people talk about the ethics of public accounting,
they are discussing the responsibilities of the independent
auditor.
The responsibility of the auditor clearly: to issue an opinion about
whether the financial statement fairly presents the financial
position of the corporation. Performance of this role, attesting
that the corporation’s financial positions and operations are fairly
presented, requires that an auditor has integrity and honesty.
Further, to ensure that an accurate picture has been presented, it
is essential that the auditor’s integrity and honesty is not
jeopardized by the presence of undue influence. To bolster
integrity and honesty, the auditor must have as much
independence as possible. Those who need to make decisions
about a company based on true and accurate information must be
able to trust the accountant’s pictures if the market is to function
efficiently. Trust is eroded if there is even an appearance of a
 TRUST
• One generally gives a false picture to get another
party to act in a way other than they would act
given full and truthful information, what would
happen if such behavior were universalized?
• First, trust in business dealings that required
information about financial picture would be
eroded.
• Secondly, universalizing misrepresentation
besides leading to mistrust, chaos, and
consequently inefficiencies in the market, would
make the act of misrepresentation impossible
 THE AUDITOR’S RESPONSIBILITY TO THE
PUBLIC

Auditors are responsible for forming an opinion on whether

the financial statements are presented in accord with
appropriately utilized accounting principles. The traditional
attest statement affirms that the financial statements were
“presented fairly in accordance with generally accepted
accounting principles.”
The auditor is responsible for evaluating whether the
management accountant is fulfilling his or her obligations, and
for ascertaining the adequacy of and adherence to internal
auditing controls.
Another auditor responsibility is to convey any significant
uncertainties detected in the financial statements.
• If misrepresentation of an organization’s financial situation were
universal, auditing would become a useless function. Rick Telberg, in
Accounting Today, claims this may have already happened. “CPA firms
long ago became more like insurance companies – complete with their
focus on assurances and risk- managed audits – than attesters,”he says.
The attitude precludes telling the public what a company’s financial
condition really is. Firms with this attitude just guarantee that the
presentation won’t be subject to charges of illegal behavior. These
firms serve the client and not the public.

• This points to another important aspect of trust. Only a fool trusts

some- one who gives all the appearances of being a liar. Only a fool
trusts people who put themselves in positions where it is likely that
their integrity will be compromised. These are the reasons why
individuals take precautions against getting involved with anyone who
gives even the appearance of being caught in a conflict of interest.
Because trust is essential, even the appearance of an accountant’s
honesty and integrity is important. The auditor, therefore, must not
only be trustworthy, but he or she must also appear trustworthy.
 THE AUDITOR’S RESPONSIBILITY TO THE
PUBLIC
• DUTY to attest to the fairness of the financial
statements gives the accountant special responsibility
to the public. Puts the accountant in a different
relationships with the client who hires him or her than
the client relationships found in the other professions
• GIVEN the conflict of interests between the public and
clients, it is clear that auditors face the conflicting
loyalties. To whom are they primarily responsible, the
public or the client who pays the bill?
• Although auditors’ clients are the ones who pay the fees for
the auditor’s services, the auditor’s primary responsibility is
to safeguard the interest of a third party – the public.
Although auditors’ clients are the ones who pay the fees
for the auditor’s services, the auditor’s primary
responsibility is to safeguard the interest of a third party –
the public. Because the auditor is charged with public
obligations, he or she should be a disinterested analyst.
The auditor’s obligations are to certify that public reports
depicting a corporation’s financial status fairly present the
corporation’s financial position and operations. In short,
the auditor’s fiduciary responsibility is to the public trust,
and “independence” from the client is fundamental in
order for that trust to be honored.
 THE AUDITOR’S BASIC
RESPONSIBILITIES
• IN GAAS, consist in three general
standards, three standards of field work
and four standards of reporting, they call
for :
1. Proficiency on the part of the auditor
2. Independence in fact and in appearance
3. Due professional care
4. Adequately planned and properly
supervised field work
5. A sufficient understanding of the internal control
structure of the audited entity
6. Sufficient inspection, observation and inquiries
to afford a reasonable basis for an opinion
7. A report stating whether the financial statements
are in accord with GAAP
8. Identification of circumstances in which the
principles have not been consistently observed
9. Disclosures in the financial statements
10. A report shall contain either an opinion of the
statement taken as a whole or an assertion to
the effect effect that an opinion cannot be
expressed.
• The Cohen Report recognizes that “fair” is an ambiguous word; hence, it is
imprudent to hold auditors accountable for the fairness of the financial state-
ments, if that means the accuracy of material facts. Rather, the responsibility of
the auditors is to determine whether the judgments of managers in the
selection and application of accounting principles was appropriate in the
particular circumstance. Note that this differs from Justice Burger’s opinion that
the auditor attests to the “fairness” of the picture.
• The Cohen Report would likely find Burger’s viewpoint too rigid for three
reasons: (1) In some situations, there may be no detailed principles that are
applicable; (2) in others, alternative accounting principles may be applicable;
and (3) at times, the cumulative effects of the use of a principle must be
evaluated. The report calls for more guidance for auditors in these three areas.
Still, the idea prevails that “fairly” presented means that the report being
audited will give a reasonable person an accurate picture of an entity’s financial
status. GAAP principles, however, can be used by artful dodgers to hide the real
health or sickness of a company. Indeed, one accountant has suggested that
accounting is an art, and a truly proficient artist can, by the skillful use of GAAP,
make the same company look to be a dizzying success or a miserable failure. We
will consider the “fairness” debate in the final chapter of this book. For now, let’s
return to the Cohen Report and its enumeration of auditors’ responsibilities.
 INDEPENDENCE
• THE independent public accountant performing this special
function owes ultimate allegiance to the corporation’s creditors
and stockholders, as well as to the investing public. This public
“watchdog” function demands that the accountant maintain total
independence from the client at all times and requires complete
fidelity to the public trust
• independence in fact—that is, that the auditor is actually unbiased—is
absolutely essential to the validity of an audit
• Independence in appearance: The avoidance of facts and
circumstances that are so significant that a reasonable and informed
third party, having knowledge of all relevant information, including
safeguards applied, would reasonably conclude a firm’s, or a member of
the assurance team’s, integrity, objectivity or professional scepticism
had been compromised.
Biasanya, ketika orang berbicara tentang etika akuntan
publik, mereka mendiskusikan tanggung jawab auditor
independen, jelaskan

end of presentation