The principles of professional conduct are what govern the behaviors of organizations, and individuals in the conduct that relates to internal auditing. It usually provides the minimum requirements of behavior and conduct that is expected in the profession ( Rittenberg, 2011) . However, companies and employees find themselves violating the principles as seen in the case study.
Violations
One principle that has been violated relates to integrity which requires auditors to develop trust and, in turn, provides the foundation for reliance on their judgment. The principle had been violated by Amanda who has not given herself the chance to establish trust with the company on a professional level. More specifically, she has not had experience in working in the industry where the client company operates in. Therefore, Susan has no trust in her work or judgments.
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The next principle that was violated in the case study is objectivity which demands that internal auditors have a balanced assessment of all the circumstances that are relevant. In addition, they should not be unduly influenced by personal interests or by other people when forming judgments. The principle has been violated by Saul who is influenced by the close relationship he has with LAW LLC , and also uses its many business relationships with the business to attract new clients to Bergan Chandler. In addition, Susan Thomas was previously an employee in Bergan Chandler before joining LAW LLC as a financial controller, meaning that it would be hard for Saul to objectively audit a former colleague. Amanda has also violated the objectivity principles because she stopped making the audit queries after Susan questioned her qualifications and when Saul asked her to stop. Amanda also violated the objectivity principle for being lenient in the audit process because Susan was her former mentor. The violation is even after the fact that there was little audit evidence that relates to some of the assets that are incorporated in the balance sheet. From the case study, she also realized that if the assets were written off or written down then the company would find itself violating the loan covenant and thus causing the long-term debt of being due immediately. The consequences would be too significant for LAW to be able to continue to finance its current operations.
The final principle that has been violating in the case study is a competency that requires the application of the skills, experience, knowledge required in the performance of the services of the internal audit. The principle has been violated by Amanda and which is evident from the fact that Susan has noted that Amanda has no experience in working in the industry where the client company operates in. Her experience was in manufacturing and other companies that are inventory-intensive and as stated, the reasons for her not getting educated on the vital aspects of audit professional service firms is just because of the intensity that she saw of the audit busy season.
Conclusion
The principles of professional conduct are considered to be vital in the audit profession because they ensure the accuracy of the financial statements of the company. However, not all the companies and employees adhere to these conduct as they violate them as seen in the case study where the principles which have been violated include the objectivity of the employees, integrity, and competency. Such violation risks the quality of the audit work in the company. There is need to take the necessary actions so as to sort the issues, but it is only possible if the management of the company is willing .
Reference
Rittenberg, L. E., Johnstone, K. M., & Gramling, A. A. (2011). Auditing . Mason, Ohio: South-Western.
