Ethical Behaviour among Statutory Auditors

In light of corporate scandals over the last twenty to thirty years, auditors have been criticised
for not behaving ethically. Writers such as Prem Sikka have left the reader under no illusion
that the ethical behaviour of auditors such as Arthur Andersen has been seriously at fault and
that the regulatory bodies are merely playing catch-up in trying to ameliorate the problem.
As statutory auditors in the UK, we are guided by two primary sources with respect to our
ethical behaviour, namely The Revised Ethical Standard 2019, produced by the Financial
Reporting Council and the ethical code of the auditor’s Recognised Supervisory Body. Is the
Revised Ethical Standard, in particular, a means through which auditors’ ethical behaviour
can be improved?
The issue of influencing ethical behaviour goes well beyond the realm of audit and introduces
us to philosophical perspectives, particularly classical ethical philosophies such as
deontology and consequentialism. Peter Mozier has been writing on this issue for years and
his perspective, which is directed to statutory audit, is as relevant as ever. More recently
writers such as Samsonova-Taddei and Siddiqui (2016) have also considered the Aristotelian
perspective of virtues as an ethical driver by focussing on the importance of imparting good
traits within individual auditors rather than emphasising an imposed ethical code.
There is a wealth of information out there on business ethics and ethics within auditing.
Journals such as The Journal of Business Ethics and Business Ethics Quarterly focus on
ethics as a subject matter whereas other mainstream journals such as Critical Perspectives on
Accounting and Accounting Forum publish articles on ethics from time to time. This is just
the tip of the iceberg in that there are many more journals covering this issue.
There are a few issues to which you should pay particular attention:
 Audit regulation pertaining to one jurisdiction may differ significantly from that of
another jurisdiction (e.g. US v UK), so be careful when reading articles and texts that you
are aware of the jurisdiction to which they refer. You are writing from a UK perspective,
so please bear this in time.
 The passage of time since the article or text was published may render some of the
information out of date. This is inevitable in a subject such as audit.
 Each student’s work must be unique to that student. Any duplication of work submitted,
wherein it is clear that the contributors have colluded, will be viewed as plagiarism and
treated accordingly. Please remember that it is an academic offence for two or more
students to work together on an assignment that is meant to be done individually.
Some References as a Starting Point:
 FRC (2016) Revised Ethical Standard 2019, Financial Reporting Council, London
 Moizer, P. (1995), An ethical approach to the choices faced by auditors, Critical
Perspectives o Accounting, 6(5), pp.415-31
 Moizer, P. (2004) Independence. In M. Sherer and S. Turley (eds.), Current Issues in
Auditing, 3
rd edition, PCP, London.
 Samsonova-Taddei, A. and Siddiqui, J. (2016) Regulation and the Promotion of Audit
Ethics: Analysis of the Content of the EU’s Policy, Journal of Business Ethics, 139,
 Sikka, P. (2015) The corrosive effects of neoliberalism on the UK financial crises and
auditing practices: A dead-end for reforms, Accounting Forum 39, pp. 1–18