Gift-giving, Auditors, and the Independence Spiral

An independent audit refers to the objective examination of financial statements’ compliance by an autonomous individual using generally accepted accounting standards to assess accuracy and reliability. The independent auditor must act in accordance with the principles of professional ethics in the process of performing audits. In this context, the professional ethical principles with which independent auditors must comply include honesty, impartiality, professional behavior, confidentiality, professional competence, and care. In the scope of the principle of impartiality, the auditor’s self interest, a close relationship with clients, efforts of clients to get an auditor to adopt their own views, and other potentially compromising situations can affect impartial decision making. In such cases, the auditor performs professional activity in violation of the principles of professional ethics and impartiality. A circumstance that can cause such situations is that of gift-giving. In this study, the concept of gifts is explained, and the context of gift giving is evaluated within the scope of auditors and independent audits. Within the framework of ethics, the issue of gift-giving is examined referencing preexisting data in the literature. According to the data obtained, hospitality offers, meal offers, or acceptance of gifts given by an audit client to an independent auditor may result in self-interest or familiarity threats. As an auditor must perform audits independently, adhering to basic ethical principles, and should not accept gifts from client companies in any way, the auditor should remain vigilant regarding any incentives or gifts that are prohibited by law in many countries. An auditor’s acceptance of an incentive or gift constitutes unethical behavior and violates the principle of honesty. Unwavering attention must be paid to the nature, frequency, value, cultural impact, and transparency of any incentive offered, including the assessment of the audit client’s behavior using professional judgment. If it is determined that the incentive negatively affects behavior, measures must be taken, such as informing the company or customer business management and terminating the business relationship.