Essay Sample on Disciplinary Actions Against Auditors

Introduction

Judgment is the process of making a conclusion where there are various other resolutions. In auditing judgment involves evaluation of evidence, estimating probabilities and deciding audit procedures choices (AICPA, 2018). Frames are basically mental structures which assist auditors simplify, organize and guide the understanding of the judgment situation. Judgmental framing shapes auditor's opinions and determines information which they will consider necessarily or unnecessarily, important or unimportant (AICPA, 2018). The Framework has various elements namely; mentality, discussion, comprehension and expert principles, influences and prejudices, reflection and training.

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Basically, according to KPMG professional judgment, a good judgment procedure involves, clarifying matters and goals, determining options, collect and assess evidence, make a judgment, and articulate the documents. However, the mindset subjects an auditor to time constraints, and limited capacity. Moreover, one is more likely to be influenced by biases which are created by self-seeking or clueless pertaining to intellectual end-runs. These factors influence good judgment.

Knowledge and professional standards are the core factors of quality judgment. Coaching and reflection are of substantial significance to expert judgment progress, especially in undeveloped auditors (Arens, Elder, & Mark, 2016). Mindset is a backbone of quality judgment. Auditors should be objective and approach events independently, with the analytical and perspective mind. Expert cynicism, a mandatory notion in professional auditors assessing values, is an unbiased approach and comprises; interrogating one's cognizance, having a serious evaluation of review information. Expert cynicism is unlike expert decision; however, it is equally a significant element or subsection of the expert ruling. Expert cynicism aids in framing our mentality.

Assessment of Audit Evidence

Lastly, framing our mind in quality judgment is consultation. At professional facilities organizations such as KPMG, group participants' discussion, including involving group memberships, experts, specialists in other departments, is partly a fundamental of sustaining sound judgment and enhancing the practice of proper expert cynicism.

Violation of Professional Judgment Framework

In the incident of Zhang Hongling CPA, P.C and Hongling Zhang, CPA, October 2, 2018, who violated PCAOB rules and standards, the following components of the judgmental framework were also violated (AICPA, 2018). Respondents violated knowledge and professional standards by failing to acquire adequate suitable review information and to practice professionalism and expert cynicism. In specific, the quality judgment requires an auditor to examine the incidence and assessment of variously connected association dealings that the organization proclaimed had happened in the time under assessment. But the respondents failed to do so.

In addition, the boarding review of the 2015 Sino United Audit, respondents sullied the element of consultation. Duly to discussion with others, engaging team members and specialist to sustain judgment quality, the respondents provided the assessment group with debt annulment contracts which had been generated throughout the 2017 review but predated 2015, deprived of notifying the scrutiny group of the proofs (AICPA, 2018). Zhang also violated the mindset judgment framework element. In context to the organization's negligence to get engagement superiority evaluations, he took or did not take an action, willingly or unknowingly, that the oversights would play part in the company's destructions of AS 1220.

As such Zhang was not objective and did not approach the matters independently and with a perspective mind. Zhang failed to question his mind, and assess the audit evidence so as to frame the mindset (AICPA, 2018). As a result, he failed to plan and practice the audit processes properly so as to obtain enough review information to deliver a sensible foundation on his judgment. Proper engagement of the mindset judgment framework helps an auditor assess if associated party transaction has been accounted for and revealed properly in the monetary declarationsCITATION Phi15 \l 2057 (Leung, Coram, Cooper, & Peter, 2015). He or she is able to deliver the fundamental certification as well as assess if the conditions are reliable with clarifications from explorations and other review information concerning company goal.

An Additional Element to the Framework

Gender should be included in the framework of judgment as a key element. An auditor's judgment is the concluded decision or assessment made by an auditor that influences the procedures and the result of an audit of the financial statement (Leung et al., 2015). While gender may be treated as a personal attribute, the influence of some company's practices may vary for men and women. Moral judgment varies between men and women (Arens et al., 2016). Female auditors are more delicate to company events involving earnings and management and view earnings management actions as less ethical than male auditors.

Conclusion

Overall, previous behavior accounting study focusing on gender variations in auditors have produced mixed results with the majority concluding male's moral development is slower than that of females. Some argue that female auditors are more accurate as compared to their male counterparts. And others argued there was no gender difference. The lack of gender difference could be caused by work environment factors such as socialization, occupation responsibilities, same training, the structure of a company and the professional principals.

References

AICPA. (2018). Zhang, Hongling of Flushing, NY. Retrieved from https://www.aicpa.org/forthepublic/disciplinaryactions/2018/zhang-h.html

Arens, A., Elder, R., & Mark, B. (2016). Auditing and Assurance Services, Global Edition. New York: Pearson Education Limited.

Leung, P., Coram, P., Cooper, B., & Peter, R. (2015). Modern Auditing and Assurance Services. Sidney: John Wiley & Sons Australia.