The Board has announced that it will appoint an advisory group to assist it in standard-setting. Like their counterparts in taxation or auditing, professional accountants in business play important roles that contribute to the overall stability and progress of society.
As such, professional accountants in businesses therefore have the task of defending the quality of financial reporting right at the source where the numbers and figures are produced! Without public understanding of all these diverging roles and responsibilities of different accounting specialists working in business, public perceptions of their value may be misinformed.
The importance of the role of professional accountants in business in ensuring the quality of financial reporting cannot be overly emphasized. Auditors and professional accountants have a sound international code of ethics established by the International Ethics Standards Board for Accountants IESBAwherein the conceptual framework is set on the ethical principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.
This process will be complete if auditors consciously strive to regain the trust that has been lost. I suggested earlier that the increased importance of non-audit services as a firm revenue source was one of the contributing factors in the decline in public confidence in auditing.
Get the latest news delivered to your inbox. For other accounting firms, inspections must take place at least once every three years. I have no problem with auditors assisting their clients with traditional tax compliance and routine planning.
Registration of Public Accounting Firms First, we have built a registration system. How Was Public Confidence Lost? Public education on the diverse roles of professional accountants in business needs to be stepped up so as to increase the visibility of these roles.
These include appraisal or valuation services; fairness opinions; management functions; internal audit; legal and expert services unrelated to the audit; and any other service that the Board determines should be prohibited.
Thus setting aside the unfounded ideas that the code of ethics is just a marketing stunt and a necessity imposed upon by the affiliate professional body or law. The end result would be trust earned and developed outside regulation, involving leadership and not just processes to be followed.
Competing Demands Accountants often times face conflicts between upholding values central to their profession and the demands of the real world. Revenues from activities, such as systems design, tax planning, assistance with data processing procedures, and a host of other advisory services, became increasingly important.
Now, however, the Board will establish the professional standards that govern public company audits. Besides these roles, professional accountants take on a vast array of other roles in businesses of all sorts including in the public sector, not-for-profit sector, regulatory or professional bodies, and academia.
As firms have grown from small partnerships into worldwide organizations that hire hundreds of new professionals each year, training has become a significant issue.
When asked what accountants do, responses often mention roles such as tax agents and independent auditors. Management is responsible for the financial information produced by the company.
Situations may occur where professional accountants in businesses are expected to help the organization achieve certain financial outcomes.
By October 22, about one month from now, all accounting firms that issue or prepare audit reports on U. The Act directs the Board to establish auditing and related attestation standards, quality control and ethics standards, and independence rules for accounting firms.
As a corollary, firms began to see the audit as a foot-in-the-door to more lucrative consulting engagements.
It is vital that the profession itself regains this lost trust and rebuilds its reputation on its historical foundation of ethics and integrity Copeland, The perceived ethical climate will help individual auditors to identify situations that might involve ethical decision making.Restoring the public confidence requires considerable efforts by legislators, regulators, standard‐setting bodies, the business community, and the accounting profession.
This article suggests 12 ways that the accounting profession can rebuild public trust in financial reports and related audit functions. A description of the multifaceted role of professional accountants in business is not complete without discussing the duty that the profession owes to the general public.
As a profession that has been bestowed a privileged position in society, the accountancy profession as a whole deals with a wide range of issues that has a public interest angle. Results show that growing efforts the auditors display cast a positive gleam on public trust. Also, increased regulation, as well as communication between auditors and regulatory bodies are likely to have a positive effect on public trust.
In conclusion, growing attention to ethics derives from higher attention to quality. The Board recognizes that, in order to instill confidence, the development of auditing standards should be an open process in which the accounting profession, public companies, the investor community, and others have the opportunity to participate.
Ways to Enhance Public Trust in the Accounting Profession Custom Essay [meteor_slideshow slideshow=”arp1″] What do you believe the accounting profession needs to do now and in the future to maintain and improve public trust in the accounting profession?
Inevitably the public is losing trust in the auditing profession, previously held so high by society in general. The European Commission has also intervened and is introducing various measures to reaffirm this lost trust, which on the other hand is infringing on the ability of auditors for self-regulation.Download