RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

286 RESPONSIBLE ENTREPRENEURSHIP
Internal audit differ from external audit-is a function that, although operating independently
from other departments and reports directly to the audit committee, resides within an
organisation. Internal auditors who are members of a professional organization would be subject
to the same code of ethics and professional code of conduct as applicable to external auditors.
Internal auditors, are employees of the organization they audit, and report to management,
although in some cases the function may be outsourced. The internal auditor’s principal responsibility
is appraising an entity’s risk management strategy and practices, management, IT, systems
security, and governance processes, helping the organisation to achieve its objectives.
“Accountants and the accountancy profession exist as a means of public service; the distinction
which separates a profession from a mere means of livelihood is that the profession
is accountable to standards of the public interest, and beyond the compensation paid by clients.”
(Love, 2008)
An important event in changing investor‘s perception towards the role of auditors was
the adoption in the US of the Sarbanes -Oxley Act (2002) which is a reaction to the great
financial scandals that rocked renowned companies in America ( Enron , WorldCom , Global
Crossing, Tyco, Adelphia), which led to loss of public confidence in practice expertise in
accounting , external audit and the figures reported by companies. Due to corporate collapses,
attention has been drawn to ethical standards accepted within the accounting profession (Beverly,
Cooper, Leung).
Sarbanes – Oxley establishes rigorous standards on accounting, auditing and responsibilities
of boards. The law also requires foreign companies listed on US financial markets to
strengthen its internal audit.
Auditors cannot obtain absolute certainty that the proofs they obtain are always safe and
that all errors in the financial statements will be detected. Knowing the inherent limitations
of the audit, there is an unavoidable risk of not detecting false financial statements.
The responsibility for the prevention and detection of fraud and error rests with management.
Although the auditor is not and cannot be held responsible for preventing fraud and error,
– audit can play a positive role in preventing fraud and error by deterring their occurrence.
In recent decades, audit concept has been refined more and more, leading naturally to a
domain, with its own objectives, methods and techniques, the use of which to ensure the
achievement of these objectives.
Auditor’s role is mainly to enhance the user’s trust in the accounting information, to bring
added safety to the fact that the accounting information was obtained, treated and presented
in accordance with generally accepted accounting standards and principles.
The auditor is often in a position to make important decisions, we should not be influenced
by external factors, like a judge. The power of decision must, in these circumstances,
be matched by an exceptional personality to withstand any external pressure that would follow
the auditor’s opinion change at the expense of truth.
No auditor can provide absolute assurance that the financial statements do not contain significant
errors or fraud. There may be errors due to incorrect accounting data processing or
because the use of a wrong judgment in the selection and application of accounting standards.
There is a risk that the auditor will not be able to detect, regardless of the rigor with which
auditing standards apply.
Regardless of the legislation adopted by each country or the provisions of international
auditing standards, there are some common characteristics due to both the internationalization
of business and the influence of American standards in the field or of the large audit firms.