Accounting Questions

Question 1

Senior management setting the tone at the top for integrity and honesty is important to an organization in several aspects. Consciously or unconsciously, employees always judge an organization as ethical or unethical depending on what they think of the senior management (Gaddis, 2018). If managers act with honesty and integrity, that is what the junior employees will think of the company. Senior managers who act with integrity act as role models to employees and gain the confidence of the organization. A lack of a code of ethics in an organization can lead to several problems from the top management to the lowest level of employees. A business may be faced with legal issues for failing to follow the established rules and regulations (Gaddis, 2018). Secondly, employee performance may be negatively affected as employees may only be concerned with making money to the extent that they ignore protocol and procedures. A lack of a code of ethics also undermines the internal control system. For instance, the lack of formal ethical procedures and policies may mean there are no clear guidelines on the use of business assets leaving an organization exposed to misappropriation of assets (Gaddis, 2018).

Question 2

The audit process comprises of four distinct phases that include planning, fieldwork, reporting and audit-follow up. The audit process should be conducted in a chronological order to ensure effective supervision, review and direction of all the four phases. The chronological order of an audit process also specifies the roles and responsibilities of all participants at each step, identifies and documents the quality control criteria at every phase and also establishes clear quality control procedures during each phase (Gaddis, 2018). Following the chronological order also ensures that the audit is of quality and meets the established standards.

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