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UDC 657
Lantsova S.K. Student of Accounting and Audit Faculty Federal state educational Budgetary institution of higher education "Financial University under the Government of the Russian Federation "
Russia, Moscow
Science director: Mislavskaya N.A, Doctor of Economics Associate Professor, Professor of Accounting, Analysis and Audit Department Federal state educational Budgetary institution of higher education "Financial University under the Government of the Russian Federation "
Russia, Moscow ON THREATS OF ACCIDENT AND SELF-CONTROL IN PROFESSIONAL ACTIVITY OF ACCOUNTANT AND AUDITOR
Annotation. In the work of a professional accountant and auditor circumstances may arise that cause various threats to independence. The Code of Professional Ethics describes such threats, and lists general measures to prevent or reduce them to an acceptable level. However, the practical side of the issue requires concretizing actions in the event of threats, maintaining independence and improving the quality of assistance and audit services in the public interest.
Keywords: threat of intercession and self-control, Code of Ethics for Professional Accountants, precautionary measures and threat prevention
The professional community, both Russian and international, has the opinion that a professional accountant assumes the responsibility to act in the public interest. This is evidenced by the Code of Ethics for Professional Accountants - members of the Russian ISB (Codex), according to which the responsibility of a professional accountant is not limited solely to meeting the needs of the employer or an individual customer of services, but complemented by the requirements of professional ethics.
However, such compliance is accompanied by certain difficulties, expressed through the following threats:
a) threats of personal interest representing financial or personal interest of the accountant;
b) threats of self-control, manifested in peremptory adherence to one's own professional judgment or judgment of colleagues, within the framework of past assignments;
c) the threat of intercession, which is the peremptory advancement of the interests of the employer or customer of services, accompanied by the loss of professional independence;
d) threats of close acquaintance, arising as a result of long or close relations with the employer or customer of the services;
e) threats of blackmail, expressed in the loss of professional objectivity under the pressure of third parties.
The main problem here is the Code's too general approach to the definitions, the prerequisites for the emergence of the corresponding threats and the measures to prevent them. A detailed instruction, action plan or any detailed recommendations in the document is not contained. Of course, it is impossible to identify and prevent all threats, therefore the Code establishes a conceptual approach to adherence to the basic principles of ethics, which consists in the following: a professional accountant should identify threats, violate the basic principles of ethics, assess them and take response actions against such threats.
If there are practical examples and concrete measures for preventing and preventing threats with regard to the threat of personal interest, blackmail and close acquaintance, there is no clear understanding of the threats of intercession and self-control, which actualizes further reasoning.
A specific danger of self-control may be the fact that the same person acts as both the executive and supervisory authority in the performance of a task that is excluded in the ordinary work activity. For example, in the group that performs the task (audit, accounting reporting within the framework of accounting services outsourcing), there is a member who is or, in the recent past, was the manager or other official of the customer of the assignment.
The second threat under consideration - the threat of intercession arises if the accountant or the auditor defends the position of the customer before third parties, for example, in court, in a dispute, or represent his interests in areas other than audit.
According to the Code of Ethics, a professional accountant must be based on his own judgment in order to decide how best to prevent threats that exceed an acceptable level. It is worth noting that the notion of "acceptable level" is contained in the list of definitions, but it is formulated in general theoretical features. In this connection, we propose to consider acceptable a level that is capable of preventing the arising negative economic consequences for a legal entity.
Precautions that can eliminate these threats or reduce them to an acceptable level are considered to be measures provided for by the profession, by regulatory legal acts and conditioned by the working environment, which in turn are divided into general and specific tasks.
The precautionary measures provided for by the profession and regulations are listed in clause 1.14 of the Code of Ethics for Professional Accountants, among them:
a) requirements for education, training and experience;
b) the requirement for continuous improvement of professional qualifications;
c) external checks by authorized third parties.
Precautions in the work environment, in turn, are also contained in clause 2.13 of the Code. The main ones are:
a) - corporate oversight systems or other structures;
b) increased internal control;
c) appropriate disciplinary measures;
d) policies and procedures that allow employees to report to top management on any ethical issues without fear of being punished.
Paragraphs 3.11 and 3.12 list the appropriate precautions in the work environment, grouped in a general class and arising from the execution of a specific task. Common, basically, can be called the fundamental principles of the organization of work of professional accountants and auditors. For example, the style of leadership of an organization, which emphasizes the importance of respecting the basic principles of ethics; rules and procedures for monitoring and monitoring the quality of tasks; documented internal rules and procedures that require compliance with the basic principles of ethics and others.
The following are the precautionary measures pertaining to a particular task.
1. Involvement of a professional accountant who did not participate in the task to check the work performed.
2. Receiving consultations from an independent third party, for example, uninterested members of the board of directors of the customer of services, IPA of Russia, regulator or other professional accountants.
3. Disclosure to the representatives of the owner and / or the management of the customer of services of the nature of the services provided and the amount of the corresponding remuneration.
Moreover, the Code states that if the accountant failed to reduce threats to an acceptable level by all the possible ways, he should refuse to perform the task, or, if it is a question of threats inside the audit organization, to make a decision to leave it. However, practice shows that a permanent job change or refusal to perform an audit or accounting task negatively affects the reputation of a professional accountant or auditor, even if such refusals are justified.
As for the practical side of the issue under consideration, the Ministry of Finance of the Russian Federation constantly checks audit organizations and organizations that outsource accounting services, including compliance with ethical principles. The latest reports of the Ministry of Finance for 2016 showed that among the most significant flaws in the work of audit organizations and auditors, identified with external quality checks, deficiencies in the field of independence and professional ethics have been observed for several years.
The main, revealed significant shortcomings, following the results of such inspections, were:
1) - absence of fact or insufficient evidence to consider threats to independence and measures to prevent such threats;
2) - the lack of developed procedures aimed at resolving ethical conflicts and reducing the risk of losing independence;
3) failure to comply with the requirement for a periodic change of the person responsible for auditing the financial statements;
4) - non-compliance with the requirements for professional behavior of the
auditor.
In 2016, the Audit Council, the Ministry of Finance of Russia, the Federal Treasury and self-regulating organizations (SRO) of auditors continued work to improve the system of external quality control of audit organizations and auditors. However, an analysis of the functioning of this system indicates that there are problems in this area. Among them, in particular:
1) - lack of sufficient number of qualified personnel;
2) - low responsibility of specialists for the results of conducted inspections,
3) - the actions of audit organizations to evade external audits by changing the SRO;
4) - the lack of influence of the results of the audit on the assessment of the business reputation of the auditing organization, the auditor;
5) - a formal approach to conducting external quality control checks;
6) - the ineffectiveness of the measures taken as a result of external quality assurance checks, the absence or insignificance of their impact on the reputation of dishonest participants in the market of audit services.
The foregoing demonstrates the manifestation of formalism on the part of colleagues, not only with respect to the observance of ethical principles, but also during the conduct of appropriate audits. Note that the Russian media, despite the importance of the issue, completely ignore this topic. This silence helps to increase the number of cases of non-compliance with professional ethical principles of accountants and auditors.
As measures to prevent the emergence of threats of self-control and intercession, one can recommend:
1 - to develop and formalize at the corporate level a document sharing responsibilities for the performance and verification of a single task, taking into account the principle of confidentiality. This innovation completely eliminates the emergence of a threat of self-control;
2 - to exclude from the work team of accountants and auditors members who have any connection in the ordinary or work activity with the customer of the services. This measure is justified by the fact that the basis for the emergence of the threat of intercession is always the interest (economic or personal) carrying out the task in relation to a particular customer services. Therefore, the measure proposed by us is the only possible and effective measure.
References:
1. Code of Ethics for professional accountants - members of NP "IPB of Russia". [Electronic resource]. Access from http://www.ipbr.org/about/documents/statutes/code-of-ethics/
2. Report on the implementation by the Ministry of Finance of the Russian Federation of state control (supervision) over the activities of self-regulating organizations of auditors and on the effectiveness of such control (supervision) in 2016 [Electronic resource]. Access from the site https://www.minfin.ru/ru/perfomance/audit/monitoring/Reports/##ixzz5Cf44rELU
3. The report for 2016 of the Ministry of Finance of the Russian Federation.
Control of the quality of work of audit organizations and individual auditors. [Electronic resource]. Access from the site
https://www.minfin.ru/ru/perfomance/audit/monitoring/QualRep/##ixzz5Cf4LCs4 O
4. Report of the Ministry of Finance of the Russian Federation "Practice of external quality control of the work of audit organizations, auditors" 2010-2015. [Electronic resource]. Access from the site https://www.minfin.ru/ru/perfomance/audit/monitoring/QualRep/##ixzz5Cf4iUya 4
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