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    Ethics and auditing: setting the bar too low

    Hooper, Keith; Wang, Dr Jenny

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    Hooper_Wang_2015_COC_12_4.FINAL.pdf (550.8Kb)
    Date
    2015
    Citation:
    Hooper, K., & Wang, J. (2015). Ethics and auditing: setting the bar too low. Corporate Ownership and Control,12(4), pp.549-561.
    Permanent link to Research Bank record:
    https://hdl.handle.net/10652/3977
    Abstract
    Purpose - from a philosophical and empirical perspective this paper seeks to show how the big audit firms have managed to set the bar low so that they offer only opinions on whether financial statements meet accounting standards. It is argued that while the concepts of virtue ethics have now largely disappeared, ethical legitimacy has moved beyond consequential ethics to a form of social Darwinism. It is a Social Darwinism that is legalistic and technical as evidenced by the audit firms’ widespread use of the Bannerman clause attached to their opinions. Design - to illustrate the shift of ethical positions, the paper is informed illustrations of a failure to discharge a duty of care to the public. Findings – the shift in underlying social values contributes to what the Economist Journal describes as a steady decline in professional ethics. This arguable conclusion is supported by various illustrations and cites the shift in combinations of cognitive, moral and pragmatic legitimacy as drivers employed by accounting firms. Research Limitations – the paper uses secondary and documentary data and is informed by conceptual analysis which necessarily in the realm of ethics may be contentious. Originality – the paper seeks to link the changing social values with changes in legitimisation and to show shifts in accounting practices like the recent practice of issuing disclaimers.
    Keywords:
    auditing, New Zealand, code of ethics, disclaimers, Kant, unilateralism, Social Darwinism, values
    ANZSRC Field of Research:
    150102 Auditing and Accountability
    Copyright Holder:
    Virtus Interpress
    Rights:
    This digital work is protected by copyright. It may be consulted by you, provided you comply with the provisions of the Act and the following conditions of use: Any use you make of these documents or images must be for research or private study purposes only, and you may not make them available to any other person. You will recognise the author's and publishers rights and give due acknowledgement where appropriate.
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    © Unitec Institute of Technology, Private Bag 92025, Victoria Street West, Auckland 1142