The Ethical Code Of Ethics

4083 Words17 Pages
This essay will discuss the ethical code that has major influence on audit failure and what scholars are saying towards auditor’s credibility and auditor’s code of ethics because when a company goes bankrupt the auditor’s independence is questioned and shaken (Moore et al 2006). It will also show what legislative body governing auditors are doing because users of financial statement are searching for auditors whose obligations covers: report of correct records, assurance that the financial statement is of true and fair view, company guards against errors and fraud, auditors are abiding by the rules and so on (Percy 2007).
In light of ethical principle, we will discuss its role in audit failure in the last few decades showing the unexceptional high rate of accounting and audit scandal. The situation has turn into a basic issue in corporate America. A vast, freely exchanged partnership gets an unqualified audit report, and presently from that point falls with the news that the financial statements are terribly misquoted. In what manner can this happen over and over unless there are some kinds of problem with the ways these organizations are audited, such as audit of groups, private and public sector. According to Sarbanes-Oxley Act of 2002 the end goal to restore the trust and faith of the public in auditors was the formation of the Public Company Accounting Oversight Board.
However, legislators have been utilizing audit failure as reasons to present extra
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