Such drive of accountability comes from the quest of integrity from public sector management (Oshisami, 2004). Off late, the government sector is coming into increasing focus because of the rise in number of frauds and inappropriate use of public funds. Such irresponsible behavior on the part of the government has called increased attention to accountability and transparency on the part of auditors and accounting managers in these firms and those associated with such government firms (Banker, Chang & Cunningham, 2003).
The paper is aimed at finding out the possible reasons behind ethical issues that auditor experience in government firms over auditing practices. The paper proceeds in two forms of data analysis to support and provide weight to the view. The primary data is collected by means of an interview of 30 auditors belonging to a private audit firm who do audits for government organization. The interviewees were quizzed over various aspects of ethical auditing problems in government firms.
The secondary research over the topic was done by means of extensive research through journals, articles and books. The research moved on to identify problem areas in ethical auditing and tries to suggest recommendation for improvement over those.
Auditing can be defined as a self-determining examination of books of accounts of an organization done by a designated person which gives a fair view of whether accounts maintained are true and reasonable and also whether they comply with regulatory requirements or not. Audit can be classified into three types of categories.
In a recent report, it was found that one of the big four auditing firms, Ernst & Young had reported a flaw in about 48% of its audits revealed by the US government auditing regulators. Such inefficiencies included insufficient tests of their customer’s internal safeguards, failure of identification of revenue