Conflict of Interest

Background: Conflicts of interest and the resulting ethical dilemmas play a decisive role in the unethical behavior of independent auditors. The main objectives of this study are to identify different situations of conflict of interest of independent auditors and the resulting ethical dilemmas and also to find strategies for managing and controlling each of these situations. Method: In this paper, the exploratory approach of the mixed research method (qualitative-quantitative) has been applied. The statistical population in the qualitative stage is the experts in the field of independent auditing. Accordingly theoretical sampling and after conducting semi-structured interviews, theoretical saturation was obtained and qualitative content analysis method analyzed the data. In the quantitative stage, a questionnaire is designed based on the results of the qualitative stage and distributed among a random sample of members of the statistical community who are certificated public accountants working in audit firms and the structural equation modeling method used to analyze the data. Results: Findings showed that independent auditors become involved in conflicts of interest and ethical issues when disagreeing with a client they fear of losing, when facing with inappropriate job opportunities, when conducting the review process, and when facing with challenges in performing tasks. Also, managing the conflict of interest of independent auditors require the collective efforts of owners, the community of certified public accountants and independent auditors at the individual level and at the level of the audit firm. Conclusion: The results of this study are important because they can provide a good framework for promoting ethics in the auditing profession.

When auditors intentionally or unintentionally approve financial statements in line with the views of their employers, the public interest and the auditing profession are at serious risk. The purpose of this study was to examine the process by which auditors' interests will influence decision making. To achieve this goal, first in the qualitative part of the research, by studying the background of accounting research and interviewing experts through the fuzzy Delphi method, the effective components on conflict of interest were identified. In the second part of the study, using social-cognitive meta-theory and operational decision-making power in the stimulus-organism-response (S-O-R) paradigm, data obtained from 362 certified public accountants. Smart-PLS software and Structural equations have been implemented for data analysis and hypotheses testing. Cognitive processes, including expected positive outcomes, understanding the problems of consistent decision-making, and ethical judgment, play a mediating role between the conflict of interest and deviant decision-making, and through these intervening variables, conflict of interest can be monitored and reduced. The results show that professional ethics with the confirmation of all hypotheses are considered as the most effective component. It also showed that reducing the expected positive results, increasing the understanding of problems, and reducing the auditors' ethical judgment in the assigned tasks will lead to deviant decisions. By implementing the proposed algorithm, cognition processes can be directed towards consistent decision making.

The experience of our conscience belongs in the same category as feeling, thinking and wanting. However, it has a special aspect, namely the presence of other human beings as absolute entities. The process of experience is concerned with the way to best promote your own interests, with how far you will go in actualising your essential characteristics as an absolute entity. The discussion of our urge for survival shows that we can go quite far in that respect, and that to actualise that urge, there are in fact no boundaries; everything is permitted. The same can be said about actualising our other essential characteristics, but the difference is that our need to do so is perhaps less cogently present; it is not our life, or at least not our continued material existence, that is at stake. Nonetheless, we can and may even choose to go to extremes in this respect and thus to give ourselves priority over others. Respect for the interests of others is based on self-respect, which may lead you to decide to subject your dealings with other people to a set of standards for yourself. Here we enter the area of morals and ethics, to which we can attach a complete moral philosophy and on the basis of a belief, a moral theology. At the end of this road is total love of yourself and others, because you have come to realise that it is the only way that can lead to the fourth essential characteristic of human beings as absolute entities, namely self-fulfilment. You will then have developed in a way that allows you to give yourself and others the scope we need as absolute entities (compassion, solidarity). Self-fulfilment is achieved through self-development, i.e. discovering and honing our gifts and talents and thus finding our own identity (development), a process by which the lives of human beings as absolute entities acquire purpose (the search for meaning). Self-fulfilment is self-actualisation, the state that results from the realisation of the essential characteristics of human beings as absolute entities, and it leads to satisfaction derived from ourselves or our activities, a sense of being satisfied with what we have accomplished.