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The Factors like Family

Autor:   •  November 18, 2011  •  Essay  •  405 Words (2 Pages)  •  996 Views

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The factors like family and personal relationships between the member of assurance team and the officer of the assurance client may affect the auditor's ethical judgment. Those relationships above can bring significant influence over the operating, financial, or accounting policies of the client or who may in the audit-sensitive position. There are two ways to distinguish between immediate family members and close family members. Immediate family members are the spouse or dependent. The close family means to the parent, child or sibling. There are conflicts occurs between an assurance client and an auditor re family members or other personal relationship. The closer or complicated relationship will influence results of the audited report due to the auditor may against the ethical value during their working.

The threats will increase and rise when the position the close family members holds with the client and the role of the professional on the assurance team. For instance, one of the members from the audit committee has a brother or sister who is the CEO of the audit client. Due to the power exercised by the CEO can strongly influence the company performance and the operating policies, the member from the audit team should quit and not suppose to participate this project anymore. Its will leads the threats or the audited report will have unfair judgments if the member continue participate in the project. Its may leads the whole team involving in against the ethical behavior in working the auditing exercises.

Such close relationship can also give rise to self-interest, familiarity and intimidation threats. Therefore, partners and employees of the firm are responsible for identifying such relationship or persons. Any threats arising from such relationship should be evaluated. If the threats had the significant influence, safeguards should be implemented in order to reduce the threats happen.

On the other hand, if there is existing relationship


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