What type of work doe auditors perform?
• Based on the Sarbanes-Oxley Act (SOX), how important are auditors to a company?
• In your opinion, why must an auditor be ethical?
• In your opinion, do you think that an auditor should be a certified public accountant (CPA)? Why or why not?
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According to Short, Toffel & Hugill (2013), an auditor plays an invaluable role in accounting in different capacities. The most notable being to offer opinion on whether the financial statements of an institution have complied to the existing legal structures and doctrines of the accounting method that is applied in a country or region. There are other roles they play such as interpreting the financial statement to investors or offering accounting services to firms that would like to adopt new financial practices or simply advise. In this last capacity, an auditor tends to be viewed as an accountant who possesses the skills of a public certified accountant (Kaplan & Witkowski, 2014).
As Coates (2007) notes, In the US, the adoption of the Sarbanes-Oxley Act (SOX) in 2002 transformed the roles of an auditor by giving them more rights and privileges while at the same time specifying some of the roles that an auditor can play at a specific time. For example, to avoid a conflict of interest, the act required the auditors to only perform one role at time. Either as a procured accountant or as an auditor. As an auditor, the act set an environment of independence to allow them to report any variations or mismatch to reduce incidences of fraud such as those witnessed in companies such as Enron. An accountant has to thus be familiar with the principles that a public certified accountant applies in order for them to pin point any errors or mistakes.
Upholding ethics is thus an essential attribute that auditors should possess since they have been trusted by the law to ensure the books of accounts comply to the set expectations. Reviewing collapse of some of the major giants that led to the creation of the act would explain why being ethical should be the virtue for the auditors since were it not for the unethical practices that auditors in these institutions adopted, some of these companies would still be existing (Short, Toffel & Hugill, 2013).