Ethical Scenarios
Case Study
Topic of Interest
Jump to main content
Ethics Resources for Accounting Professionals
External Auditors
Ethical Scenarios
Ethical Scenarios
Is it fine for me to accept meals, entertainment, gifts, employment contract, etc. from my clients?

It is not uncommon for clients to treat external auditors to meals and other entertainment during the course of an audit to get acquainted with them, or offer gifts to the auditors as a token of thanks after their hard work.

Some clients may even offer competitive employment contracts to their external auditors, especially the seasoned ones who have become conversant with their clients' business operations and financial positions after years of audit service. A considerable bonus would often be given if the auditors join the companies at a particular time.

Ethical Scenarios
The transactions look suspicious. Should I turn a blind eye to them?
During audits, external auditors may come across suspicious transactions which involve large sums of money or unusual patterns of activity. The transactions seem to have no apparent economic purpose though no irregularity is identified at the time. Despite requests for clarification, the client refuses to provide the required information and no reasonable explanation is given.
When handling the above situations, external auditors should remain vigilant to the legal requirements under the Prevention of Bribery Ordinance (POBO) (Cap. 201) and other relevant legislations, as well as the various threats to the fundamental principles of ethics for professional accountants.
Topic of Interest Case Study Ethical Scenarios
Last update: 
Level AA Conformance to Web Content Accessibility Guidelines 2.0