Powered by ProofFactor - Social Proof Notifications

Ethical Challenges in the Fee-Payment System and the Role of Technology in Accounting and Auditing

Jul 1, 2023 | 0 comments

blog banner

Jul 1, 2023 | Essays | 0 comments

Question One

The Fee-payment system can cause a conflict of interest that may lead to a lack of objectivity of audit. For instance, when the fee of the auditor is from the entity being audited. This is because the auditor will feel entitled to keep the people who pay their fees happy. Notably, there is an ethical problem that exists in auditors when there is a conflict of interest between the client and the client management; therefore, there is a need to keep all auditors independent.

CPAs can be independent even when their fee is dependent on the client. However, this can only happen if the auditor is willing. Precisely, the CPAs can decide to hold a characteristic of a profession and say no when companies try to break rules. (Dauber, Shim, & Siegel, 2013, pg. 620). Consequently, there would be no ethics rules for CPAs if every auditor decided to do the right thing. Furthermore, the audit fee can come from the entity being audited through the audit management group. In this scenario, the auditor will be obligated to the independent audit management group as a client. Since the group only wants true financial statements, then there would be no conflicts of interest.

 

People Also Read

 

Question Two

With the development of technology, few accounting skills are expected to decline in their importance such as manual calculations and routine-back office work due to workplace automation. However, the roles of accountants will remain since essential technical finance services will remain important. Therefore, accountants will need to combine their expertise with communication skills, leadership, and IT skills to keep up with emerging technologies.

Technology’s biggest impact on accounting is the ability to develop computerized systems (Melnychenko, 2018, pg. 12). This will lead to increased functionality of the accounts department, which still requires accountants to run them. Moreover, they will have faster accurate processing; therefore, technology will not decrease the demand for accountants but will only change the way their job is done. There are also new accountant opportunities in developed countries as development in technology raises the demand for talented workers to help in business and economic growth.

Question Three

Having a written code of conduct will reduce fraud and other dishonest acts in an organization. This is because the code of conduct provides employees and managers an overview of the expected type of conduct. Furthermore, apart from outlining the acceptable behaviors, it also provides measures to be taken if any employee or manager violates the code of conduct. Nonetheless, the workers are informed of the rules during the orientation; therefore, one has an opportunity to quit if he or she finds it difficult to adhere to the rules. Additionally, the codes allow the organization to hold everyone accountable.

Code of conduct guides employees on their behavior in the organization. Therefore, employees are aware of what they should do while in the office and the activities they should engage in. this helps to make the value system of the employees strong hence reducing the chances of anyone engaging in frauds. A purposeful code of conduct should establish a commitment to an organization by being the company’s ethical framework. This builds a reputation of the company which every employer feels obliged to maintain. By clarifying the organization’s mission, values, and principle through a code of conduct give employees a standard of professionalism. As a result, it acts as a central guide and reference for employees.

References

Dauber, N. A., Shim, J. K., & Siegel, J. G. (2013). The complete CPA reference. John Wiley & Sons, pp. 1-752

Melnychenko, O. (2018). Blockchain Technology in Accounting and Auditing. Independently published, pp. 1-24.

5/5 - (6 votes)

Need Support in Studies? 📚 – Enjoy 7% OFF on all papers! Use the code "WINTER2024"

X