Conflicts of interests in financial auditing, a danger that can be avoided

Author:Lecturer PhD. Daniela-Tatiana CORODEANU

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Keywords:conduct rules, conflict of interest, bribery, influence, transparency, code of ethics, trust

Abstract:
The behaviour of the auditor must be in conformity with the professional Code of Ethics. A correct behaviour on the part of the auditor, of which he is aware, involves fairness and integrity. The auditor is fair if he creates an atmosphere of confidence. The most common unethical behaviour in financial auditing is represented by conflicts of interest. A conflict of interest is a situation in which someone in a position of trust has competing professional or personal interests.\r\n\r\nLet us observe some examples of conflicts of interest: Personal business, in which public and private interest clash; Another job, in this case, the interests of a job are in contradiction with the interests of the other job; Family interests, the wife/husband, child or other close relative is employed (or a candidate for employment) or when goods or services are bought from another relative or company that is managed by a relative; Gifts from friends that do business with the one that receives them (these gifts can include intangible value objects, such as a means of transport or a rented dwelling).\r\n\r\nSuch conflicts may create problems: they inhibit free discussion, generate decisions which are not in the best interest of the organisation, induce the risk that the organisation acts improperly. The best way to handle conflicts of interest is to avoid them entirely. If this is not possible, the following measures can be used: public information, refusal/withdrawal, third-party evaluation, Declaration of interest form and code of ethics.\r\n\r\n

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