ETHICAL ISSUES RELATED TO AUDITING (STUDY OBJECTIVE 12)

All types of auditors must follow guidelines promoting ethical conduct. For
financial statement auditors, the PCAOB/AICPA has established a Code of
Professional Conduct, commonly called its code of ethics. This code of ethics
is made up of two sections, the principles and the rules. The principles are
the foundation for the honorable behavior expected of CPAs while performing
professional duties, whereas the rules provide more detailed guidance.
Following are the six principles of the code:

1. Responsibilities. In carrying out their professional duties, CPAs

should exercise sensitive professional and moral judgments in all
their activities.
2. The Public Interest. CPAs should act in a way that will serve the
public interest, honor the public trust, and demonstrate
commitment to professionalism.
3. Integrity. To maintain and broaden public confidence, CPAs should
perform their professional duties with the highest sense of integrity.
4. Objectivity and Independence. CPAs should maintain objectivity
and be free of conflicts of interest in the performance of their
professional duties. CPAs in public practice should be independent
in fact and appearance when providing auditing and other
attestation services.
5. Due Care. CPAs should observe the profession's technical and
ethical standards, strive continually to improve competence and
the quality of services, and discharge professional responsibility to
the best of their ability.
6. Scope and Nature