ACG 5637 Chapter Notes - Chapter 16: Financial Statement, Professional Responsibility, Reward System
9 Nov 2020
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There are 2 other individual judgment biases that are applicable to audit decisions: the confirmation bias and the hindsight bias (aka the curse of knowledge). The confirmation bias implies that auditors may favor evidence that supports a preconceived opinion about the fs possibly leading the auditor to disregard evidence that might be important. Concerns about ethical reasoning in individual professional judgment: Ethics is a set of moral values or principles upon which an individual bases a decision about his or her behavior. The purpose of the aicpa code is to define the minimum levels of professional responsibility and behavior that are expected of a certified public accountant in the us. An auditor must be both independence in face and independence in appearance. Partner rotations every 5 years with a 5-year cooling off period before they can return to that engagement. Also, every 7 years with a 2-year cooling off period for partners that have significant decision making roles.
