MANAGEMENT OF ETHICAL BEHAVIOR OF AUDITORS

Abstract

The purpose and tasks of the paper are to develop effective tools for the internal control at audit firms, including monitoring and self-assessment, to improve the quality of professional performance. The relevance of this study is determined by the high expectations of society to the quality of audit opinions. The information quality according to the results of the audit is achieved by adhering to strict professional standards and ethical conduct. Audit companies organize control over the implementation of ethical principles, which requires addressing issues of monitoring and self-assessment in the management of ethics. Methodology. The authors used deductive and empirical methods. The material for the development of conclusions on the organization of monitoring is collected upon the results of a survey of 150 auditors, accountants and managers of companies. 96 full responses (64% of all respondents) were evaluated by five experts. The questions in the survey are designed to identify the audit experience of the ethics internal control organization in audit companies, and the results of its compliance assessment. Automated application capabilities of analysis and modeling of the program “1-C Accounting 8.0” were used for data processing. Results. The authors propose the auditors’ compliance with ethical testing standards and calculations of the effectiveness indicators of the ethical values compliance as tools for assessing. The authors see the organization of such an element of internal control in the need to formulate clear ultimate goals for auditors. As goals need to be measured, the following criteria for assessing their achievement are proposed: ethical values are known and adhered to; senior management is aware of the ethical foundations and they serve as an example; staff understands and adheres to the code of conduct; active promotion of ethical principles by senior management. The authors conclude that ensuring leadership of senior management, both by example and in behavior is an important component of the implementation of organizational measures for ethical behavior. If such an ethical manner in the behavior of the company’s management is achieved, it is an important positive contribution to the organization of the ethical behavior management: employees trust and feel confident in management decisions. Practical implications. Achieving the goals of managing ethical behavior of senior management can be recognized by the following criteria: senior management is recognized by co-workers as an example of high standards of behavior, willingness of senior management to be leaders in these issues and take action on misconduct, understanding individual and collective responsibility for compliance with high ethical standards. The implementation of objectives and organizational measures will achieve the defined criteria by monitoring the behavior of auditors on compliance with ethical standards. Taking into account the experience of audit companies, revealed during the survey, the authors propose to organize the monitoring of ethical behavior as an open, honest and transparent process. The awareness of all employees and ensuring confidence in its conclusions and results are the conditions for its establishment. According to the authors, the abovementioned is achieved through the availability of annual reports, regular assessment of the strengths and weaknesses of audit behavior, dissemination of information on the example of senior management in ethical behavior, staff awareness of the value of monitoring ethical behavior and their participation in annual surveys. Value/originality. The authors propose criteria for monitoring and self-assessment: incentives for all employees for good conduct, application of incentives and sanctions to overcome immoral acts, informing employees, effectiveness of incentives taking into account the specifics of high ethical culture of the audit company. The proposed measures will strengthen the elements of the internal quality control system and can be used in external evaluation of the quality of the audit company’s activities. Implementation of proposals can lead to the organization of audit work on a high quality, responsible basis, which can increase the trust of users in the results of audit activity.