Business Ethics Potential Conflicts
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Answer each question below. Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.
1) What are the three potential conflicts of interest that can take place during the auditing process? Explain.
2) How do decisions made during the ethical cycle affect corporate culture?
3) List and discuss the decision making steps in the ethical cycle from a global perspective.
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Solution Summary
Business ethics is examined. The three potential conflicts of interest that take place during the auditing process is determined.
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1) What are the three potential conflicts of interest that can take place during the auditing process? Explain.
Auditor-Firm conflicts of interest arise from the fact that firms will attempt to ensure that financial statements appear to show that executives are competently managing the tax company, which could result in pressure being placed on auditors to sign clearance for audits regardless of any concerns that may exist in reference to the auditor possessing concerns about the statements that they feel pressured to sign off on.
Shareholder-management conflicts of interest are predicated upon shareholders possessing too much influence over the financial statements of the company wherein managers will provide inaccurate statements to placate these shareholders to avoid any negative issues related to "unclean" financial statements. Shareholders could wield unwarranted control over the auditors because they pay the external auditors salary.
Self-interest-professional standards conflicts of interest are predicated upon situations wherein auditors may be capable of benefitting by violating professional standards that have been established by accounting organizations for personal ...
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