Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 10

According to the IAA Code of Ethics, internal auditors should make a balanced assessment of all the relevant circumstances and should not be unduly influenced by their own interests or by others in forming judgments.  Apply this statement to the actions of Cynthia Cooper in the WorldCom case.

Step 1 of 2

Ethics:

Ethics is the set of some moral values and principal that differentiate right and wrong morally.

Audit:

The audit is the process of checking the financial statements of a company `to ensure that it is 100% authentic and free from any kind of bias or fraud.

Code of ethics:

This includes some standard and rules that every auditor need to follow. This includes the following five codes:

1. Integrity: It is an obligation, to be honest, and professional.

2. Objectivity: It is the obligation to maintain the authenticity of financial statements. The financial statements need to be free from any kind of bias, manipulation, and error.

3. Professional competence and due care: The auditor needs to maintain the level of skills and knowledge required. The auditor must train the staff working with him.

4. Confidentiality: It is the responsibility of the auditor not to disclose inside information of the client to anyone without authority.

5. Professional behavior: It is the responsibility of the auditor to follow all the rules and regulations and not take any action which discredits the profession.

6. Auditors' independence: The auditor should be independent of its client because dependence can affect its decision or result.