Problems of professional ethics standards of auditors in Ukraine

This study is dedicated to the many problems arising from incompliance by auditors of principles of profes­ sional ethics that cause problems not only in the reliability of the published findings, but also cause problems of global mistrust of users of financial statements to the audit profession. This generally creates obstacles to transparency mechanisms for disclosure and verification of information enterprises in Ukraine, not encourag­ ing the formation of good investment climate. The study proved system of organizational support to create an environment to observe the principles of professional ethics in the performance of audit tasks based on mea­ sures of specifying and eliminating threats to the independence of the auditor. In this regard, was proposed the structure and substance of the relevant organizational and administrative documentation, which is part of the internal quality control system of audit services.

Professional ethics is a moral code th a t exists in almost every profession, a set of rules th a t ensure the moral nature of the relationship related to the profes sion, as well as a branch of science th a t studies the spe cifics of morality and norms of behavior in a variety of activities.Code of Ethics is required for ensuring the quality of services provided by the profession.It is also im portant to service users (custom ers), because sometimes they themselves can not assess the quality of services because of their complexity, and other fac tors.Professional ethics exists in the activities with perm anent nature and moral-psychological elements in its character, th at are formed over time.And audit ing in this sense is not an exception.
The audit ethics practically establishes and re flects the high degree of moral regulation of many as pects of auditor's activity.M uch of the ethical provi sions embodied and reflected in the laws, regulations and code of ethics of auditor.The audit ethics as a system of special knowledge about morality of auditor examines the sphere of consciousness and behavior of auditors moral relations and patterns of their forma tion.Auditor professional m aturity is characterized not only by obtained knowledge and skills bu t also by the appropriate level of personal morality, under standing of moral demands of their profession.
Transparency of information (financial, or in tegrated corporate reporting) which is disclosed to stakeholders and is relevant and useful, unquestionally, is a prerequisite for the existence and develop m ent of financial markets, creating a favorable invest m ent climate, corruption prevention.However, this requires a corresponding development of the theory and practice of auditing, analysis of the country which creates in potential investors the understand ing and in the future credibility to the conclusions of © V. P. Bondar, 2017 the independent auditors.
However, as the practical experience of auditing show, there are significant problems of complying w ith ethical principles in the course of the audit.And if they are not as evident in the design of quality con trol audit services, the operation of the system there are numerous cases of non-compliance w ith the prin ciples of professional ethics.In particular, according to the Register of audit firms and auditors of the Audit Chamber of Ukraine as of 07.12.2016.Of Ukraine audit activity there in 1032, of which only 453 (43.9%) passed the quality control m onitoring system, a key element which, according to ISQ C 1 "International Standard on Quality C ontrol 1" is relevant to ethi cal principles.This indicates significant problems of observance of professional ethics and auditor th a t re quires the establishm ent of proper control over such violations w ith a view to adapting relevant policies and procedures and ensure their applicability in the professional activities of auditors.
A deeper study requires theoretical and applied aspects of the problems existing today in Ukrainian not complying w ith professional ethics, leading to de terioration of the quality of audit services and reduce confidence in the domestic audit.
Theoretical issues and problems of im plementa tion of the requirem ents of professional ethics of audi tor was devoted to the researches of S. Bardash, L. Chizhevskyi, H. Davydov, A. Herasimov, L. Hutsalenko, M. Korinko, B. Longhorn, O. Peter, N. Proskurina, O. Redko, V. Riadska, V. Rudnytskyi, N. Shalimov, V. Zhuk and other domestic and foreign scientists and researchers.However, a deeper study requires theo retical and applied aspects of the problems existing today in Ukrainian non auditors professional ethics, leading to deterioration of the quality of audit servi ces and reduce confidence in the domestic audit.
The study aims are to identify major problems in complying with the principles of professional ethics of auditors of Ukraine and their solutions.
The negative image of Ukraine as a potential re cipient of foreign investm ent is related not only to the problems of corruption com ponent of the national economy, b u t also to the transparency of financial re porting of domestic companies.In particular, the lat ter show a formal attitu d e to ensure the accuracy and completeness of the disclosure of financial and other relevant information, mainly because few understand the benefit of this disclosure for the company in term s of m eeting the information needs of stakeholders.However, this situation is compounded by the fact th at persons whose activities are designed to promote adequate disclosure of enterprise information and re duce uncertainty about its users, in the face of fierce com petition in the audit seek to maximize their own economic and other benefits, putting it at risk of fun dam ental principles of professional ethics auditor.
Due to the fact th a t the audit is the type of profes sional activity th at provides financial and economic stability and creates the basis for decision-making in unpredictable economic environment, we believe th at solving the problems of non-compliance w ith the principles of professional ethics auditor becomes cru cial socio-economic importance for the development of economic and investm ent potential of our country.
Code of Ethics for Professional A ccountants (hereinafter -th e Code of Ethics) identified five fun dam ental principles of professional ethics, including: 1) integrity; 2) objectivity; 3) professional compe tence and due care; 4) confidentiality; 5) professional behavior.[1, p. 1005].Let us consider these principles.Thus, the principle of integrity, according to the Code of Ethics "... means the obligation of all professional accountants to be straightforw ard and honest in all professional and business relationships, honest con duct of business and truthfulness" [1, p. 1101].
We believe th a t in general the principle of integ rity can be violated in m atters of auditor interaction with the customer: 1) formation of false or incomplete information on significant audit issues th a t m ust be reported to ma nagement personnel or those who are endowed with the highest powers (in accordance with ISA 260 and ISA 265); 2) formation of false or unsubstantiated opinion of the auditor on the financial statem ents of the client (violation of ISA 700 and ISA 705 in the grounds of neglect or modified audit opinion neglect of criteria when determ ining the type of modification); 3) establish economically unreasonable prices for services of audit, based on the grounds of persecution of own economic benefit or pricing based on prices of auditors (during the actual work of assistant auditor).
The next principle -objectivity -assuming th at the auditor should not compromise on their profes sional or business judgm ent in practice associated w ith complex threats to independence [1, p. 1112].In particular, it relates to the self-interest th reat (fear of losing profitable customers determ ine the risk of expressing opinion), threats to its own estimates (im possibility of objective assessment of the information in the preparation of which involved the auditor), the th reat of pressure (threats or fear pressure th a t put the customer or a third party to generate opinion focused on subjects such requirements).However, uncom pli ance w ith the principle of objectivity may be ignoring threats at the tim e of their occurrence, including the formulation of the opinion (opening only some -only positive or only negative -of the parties, non neutral w ording in the audit report).This is a consequence of the existing conflict of interest at the tim e of the client or when deciding to cooperate w ith it or, on the contrary, there is a th reat of family and friendship.
According to the Code of Ethics, the principle of professional competence and due diligence obliga tions mean m aintain professional knowledge and skill at the level required to provide the client or employer w ith com petent professional service and providing professional services to act diligently in accordance w ith applicable technical and professional standards (section 130 [1, p. 1112].However, as the practice of auditing, im plementation of this principle occurs at all stages of the audit: -when making the task of auditing, the staff com petence is assessed for its implementation, and the appointm ent of the group of audit engagement must assess the potential members of the group to ensure compliance with their term s of professional compe tence and engagement specifics of the clients activity; -partners, when planning the engagement audit team should optimally allocate members of the group for checking individual sections according to their level of professional competence; -the performance of objectives, professional competence and due care is provided through docu m entation of all audits amendments to planning docum ents in connection with the identification of additional risks distortions of alternative treatm ents, and through oversight and review of audit task per formance.
The principle of confidentiality, according to the Code of Ethics means the auditor should refrain from disclosing information obtained during the engage m ent and / or use for their own benefit or for the ben efit of the parties [1, p. 1113].Following this principle is ensured through strict im plementation of informa tion security of audit firm, including a num ber of ele ments, including the security of information systems, security, docum entation and customers, restricting access to certain parts of the firm outsiders like.
Last principles of professional ethics, which is called professional behavior is th at during its acti vity the auditor should behave in such a way as not

УДОСКОНАЛЕННЯ ОБЛІКУ ТА ЗВІТНОСТІ
to discredit their own procession or colleagues in the profession, and distribute information about their use ful contacts with customers or authorities, cover on the auditor only accurate information that can be tested and used by potential clients only to a decision on possible cooperation with due regard to the experience of audi tors in th e art, professional competencies and others.
Note th at compliance w ith these principles should be regulated and organized at different levels of qua lity control audit services.In particular, the results of their research can be divided into four levels: interna tional, national, local, personal (Table 1).-planning an audit engagement; -carrying out the procedures provided for by international auditing standards; -identifying needs and possible use of the internal auditor, the expert auditor, receiving counseling; -formulating opinions on the financial state ments of the customer based on audit evidence obtained and materiality and comprehensive ness of identified misstatements Personal Informal internal motivational levers that are necessary in the prevalence and importance of adherence to the principles of professional eth ics on the interests and needs The monitoring system implemented at their own ethical constraints, values, self-esteem and leverage critical when deciding on professional activity in general and the specific tasks Despite the fact th at elements of quality control system include relevant ethical requirements, how ever, believe th a t ethical principles implemented in all other elements, in particular as described in Table 2.It should be emphasized th at the dark color in ta ble 2 marked the development of internal regulations (rules, regulations, standards etc.) in relation to the fact th a t their development and im plementation ac tivities of the audit firm formalizes environm ent qua lity control, specifying the rights and duties the mem bers of the task and the officials of the company and is the basis of prevention of threats to independence threats and failure to respect professional ethics.
Adherence to the fundamental principles of pro fessional ethics can be achieved through the organiza tion of audit firm adequate system of quality control audit services, in particular by developing in-house policies and procedures for quality control.(

) w o u l d b r i n g p e r s o n a l r e s p o n s i b i l i t y f o r c o m p l i a n c e w i t h c u r r e n t l e g i s l a t i o n o n a u d i t i n g a n d p r o f e s s i o n a l s t a n d a r d s a n d t h e C o d e o f E t h i c s f o r a u d i t o r s o f t h e c o m p a n y r e c e i v i n g t h e m a p p r o p r i a t e a s s u r a n c e s a l l o w s m a n a g e m e n t t o e s s e n t i a l l y t r a n s f e r t h e r e s p o n s i b i l i t y f o r q u a l i t y c o n t r o l a u d i t s e r v i c e s f r o m t h e l o c a l l e v e l ( o n t h e l e v e l o f t h e m a n a g e m e n t o f t h e a u d i t f i r m a s s u c h ) a n d p e r s o n a l l e v e l ( e x p l a n a t i o n o f t h e n e e d t o o b s e r v e t h e p r i n c i p l e s o f p r o f e s s i o n a l e t h i c s , a n d r e s p o n s i b i l i t y f o r t h e i r v i o l a t i o n is t h e b a s i s o f f o r m a t i o n o f m o r a l v a l u e o r i e n t a t i o n s a u d i t o r d u r i n g t h e p e r f o r m a n c e o f a n a u d i t e n g a g e m e n t ) ; ( 2 ) is c h e c k e d b y o b t a i n i n g a s s u r a n c e s r e g a r d i n g t h e u n d e r s t a n d i n g o f t h e c o n t e n t o f p r o f e s s i o n a l s t a n d a r d s a n d t h e i r r e q u i r e m e n t s f o r c o m p l e t e n e s s a n d t h o r o u g h n e s s o f t h e a u d i t
p r o c e d u r e s , c o n f i d e n t i a l i t y r e q u i r e m e n t s ; (

) is c h e c k e d b y t e s t i n g c o m p l e t e n e s s , t h o r o u g h n e s s a n d e f f e c t i v e n e s s o f a u d i t p r o c e d u r e s ; ( 4 ) c o n t r o l t h e o b s e r v a n c e o f p r i n c i p l e s b a s e d o n t h e v e r i f i c a t i o n o f t h e c o m p l e t e n e s s a n d c o m p l i a n c e h i g h l i g h t e d d i s t o r t i o n s i n f o r m u l a t i n g t h e a u d i t o r ( p u r s u a n t t o t h e r e q u i r e m e n t s
o f I S A 7 0 0 , 7 0 5 a n d 7 0 6 ) a n d r e p o r t i m p o r t a n t i s s u e s o f m a n a g e m e n t

p e r s o n n e l a n d t h o s e w h o a r e e n d o w e d w i t h t h e h i g h e s t a u t h o r i t y ( t o m e e t t h e r e q u
i r e m e n t s o f I S A 2 6 0 a n d 2 6 5 ) ; (

УДОСКОНАЛЕННЯ ОБЛІКУ Т А ЗВІТНОСТІ УДОСКОНАЛЕННЯ ОБЛІКУ ТА ЗВІТНОСТІ
Based on his own experience of auditing and the following structure internal docum ents (structure based on the requirem ents of professional standards and content sections Policies and procedures are preof auditing (ISA ) consider it appropriate to propose sented in Table 3).The general principles of pricing the services of auditing firms (in the context of creating an environment to prevent a threat of self interest of the company as a whole): descrip tion of the factors that affect the amount of the order, the possible reduction of prices for services, establishing limits of price increases for services Additionally, should develop and implement internal standard pricing for the services of an audit firm to ensure objectivity of the auditor in formulating the auditor's report on the results of the audit task 4 The system of delegation of authority and internal consultation Defines the general procedure of establish ing senior auditor within the objectives of the audit and describes the procedure for consultation of difficult and controversial issues focused on ensuring the competence of the procedures in the audit (appropriate to determine the procedures and procedure documentation addresses members of the task counseling, advising, attract needed foreign specialist) Additional samples should develop docu ment circulation auditors for advice, con sulting, outsourcing specialist, or if you can not get advice -sample documents reports of the impossibility of further auditing pro cedures 5 Personnel policy Determine the general procedure for hiring employees to the state audit firm criteria for the transfer of an employee to a higher position in an audit firm as well as the pro cedure for establishing and determining the amount of remuneration or personal fees that focused on: 1) ensure the competency of the replacement of their vacant positions; 2) promote the needs of staff in recogni tion of professional achievement; and, con sequently; 3) prevention of threats to indi vidual self-interest of individual employees At the firm level it is advisable to adopt the policy of hiring staff (qualifications for pro fessionals in the hiring) and requirements for training of specialists.The wording of the requirements for candidates for vacan cies should be carried out on the basis of the monitoring personnel to facilitate the recruitment of staff with the necessary quali fications and specialization.3 8 Confidentiality Include a description of information security audit firm in the context of the confidential ity of information received from the client, and creating organizational and legal condi tions for determining individual responsibil ity for access to information to prevent its disclosure To ensure protective measures specifying additional information should develop and implement internal standards and regula tions: 1) the storage and use at the company, in particular as regards the definition of confidential information; 2) the place of its location; 3) the manner of access to places of confidential information and the organiza tion of the relevant documents; 4) informing customers of the store introduced a sys tem of confidential information; 5) liability for disclosure of confidential information; 6) resolution of conflicts on the disclosure of confidential information 9 The organiza tion of audit services and customer relations Determine the procedure in deciding to adopt a new customer and / or extension of existing cooperation when planning audit procedures in response to assessed risks, but also determined the procedure for establish ing those responsible Here you can set the general principles and requirements for a new client and / or exten sion of existing cooperation and to further develop internal regulations containing the order of criteria assess the possibility of customer acceptance or continuation of co operation 10 Organization consulting Set the procedure of getting the employees of internal and external consultations on important issues of verification and proce dure documentation relevant procedures Settlement and opportunities of obtaining advice allows for the principle of professio nal competence and to prevent incompetent actions of the auditor relating to the lack of skills or experience that revealed in the course of an audit engagement Application of this provision will serve as the ba sis of formation of the procedural regulations when working w ith a client audit firm, will create the foun dation to develop and specify the provisions of other internal standards and regulations governing the operations of the auditor in the performance of audit objectives.
Conclusions and recommendations for further re search.The study of the theoretical and practical as pects of compliance with the principles of professional ethics of auditors in Ukraine allowed to reach the fol lowing conclusions.
1. Problems failure auditors principles of pro fessional ethics in general cause problems m istrust users of financial statem ents to the audit profession and published audit reports in particular is not con ducive to creating an attractive investm ent image of our state and local entities on foreign markets.This is also a mismatch Ukraine financial statem ents, includ ing audited financial statem ents to international stan dards in all material respects, its opacity and more.
2. The national audit practice, there are many threats to the failure to respect professional ethics, which can effectively prevent the development and im plementation of quality control systems of audit services in accordance with international standards of quality control.The study describes the main di rections of violations of the principles of professional ethics and auditor identified ways to ensure the im plem entation of the main elements of the quality sys tem auditing services.
3. Given the im portance of building a system of quality control audit services, found th a t ethical prin ciples auditor should be regulated and organized at all levels to ensure quality control audit services, which are the results of their research, four (international, national, local, personal) and describes the contri bution of relevant docum ents in the organization of quality control in term s of ethical principles.

4.
Defined as th at compliance with the fundamen tal principles of professional ethics can be achieved through the organization to audit firm adequate sys tem of quality control audit services, in particular by developing in-house policies and procedures for qual ity control.In connection w ith this proposed structure of internal documents and its substantive content on certain sections.Its application will create a basis for the formation of the procedural regulations of the cli ent specifying the audit firm and the provisions of oth er internal standards and regulations for the operations of the auditor in the performance audit objectives.
Interest in the definition of the main components of professional ethics of auditors never ceases.Of p ar ticular relevance is the problem of the definition of term inology of main components of professional e th ics of auditors.The analysis of foreign and domestic sources will summarize and identify: the current te r minology of basic elements (com ponents) of profes sional ethics of auditors such as: concept; principles; fundamental principles; fundamental requirements, etc.; the general principles of professional ethics of au ditors such as independence; objectivity; competence; honesty; confidentiality; professional behavior; pro fessional standards and technical standards; proper (reasonable diligence).

Проблемы применения норм профессиональной этики в деятельности аудиторов Украины
Исследование посвящено многочисленным проблемам, возникающим в связи с несоблюдением аудиторами принципов профессиональной этики, что вызывает не только сомнения в достоверности об народованных выводов, но и глобальное недоверие пользователей финансовой отчетности к аудиторской Ways o f the objectives o f monitoring compliance with the principles o f professional ethics in the elements o f quality control audit services (formed with the requirements ISQC 1 for the detection of complex and risky areas of auditing procedures by individual auditors and application of the requirements of professional standards Additional samples should develop instru ments to assess the quality of the staff, typi cal applications and graphics professional development through in-house training and external training schedule with guidance on thematic areas for individual employees 7 Mechanisms of customer Section contains description of the study of the qualifications of the employee in his decision, assessment of competence of staff appointed to the task, periodic evaluation of the employee in the performance objectives for the year and outline the forms and means of training of personnel In this context, at the level of the firm is advisable to adopt should develop and imple ment sample documents to assess potential customers, including Integrity customers sample documents for periodic evaluation of existing customers УДОСКОНАЛЕННЯ ОБЛІКУ ТА ЗВІТНОСТІ Continuation of Table