Investor Bulletin: The Importance of Auditor Professional Responsibilities and Ethics

Jul. 22, 2025

This document represents the views of the Public Company Accounting Oversight Board (PCAOB) Office of the Investor Advocate and not necessarily those of other PCAOB staff or the Board. It is not a rule, policy, or statement of the Board.

Investors need properly audited financial statements to make informed investment decisions. Auditor professional responsibilities and ethics form the basis for the conduct of an audit, which in turn impacts the trust that investors can place on the auditor’s opinion.

This bulletin provides a brief overview of how auditor professional responsibilities and ethics are integral to public company auditing and discusses the role of the PCAOB in establishing and upholding auditor professional responsibilities and ethics.

Auditor Professional Responsibilities and Ethics: A Foundation of Trust

The integrity of the audit is built on the bedrock of auditor professional responsibilities and ethics. To that end, auditors are expected to exercise due care and competence during an audit engagement. As examples of such responsibilities and ethics:

  • Professional Judgment: Auditors must exercise professional judgment in all phases of the audit, including when evaluating financial information. This means applying relevant training, knowledge, and experience to make informed decisions and reach well-reasoned conclusions about the course of action appropriate in the circumstances.
  • Independence: To perform their role effectively, auditors must maintain independence from the entities they audit. Auditors must be free from any obligation to or interest in the company under audit, its management, or its owners.
  • Integrity and Objectivity: Auditors are also required to maintain integrity and objectivity. This includes being honest and candid, not knowingly misrepresenting facts, and not subordinating professional judgement to other considerations. It also includes being impartial, intellectually honest, and free of conflicts of interest.
  • Professional Skepticism: Auditors need to maintain a questioning mind and critically assess audit evidence and other information obtained when conducting the audit.

The Role of the PCAOB in Auditor Professional Responsibilities and Ethics

The PCAOB’s mission is to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. As part of executing this mission, the PCAOB promotes adherence to rules and standards related to auditor professional responsibilities and ethics, through:

  • Standard Setting and Rulemaking: The PCAOB establishes auditing and related attestation standards, quality control standards, ethics standards, and independence standards. PCAOB rules require registered public accounting firms and their associated persons to comply with all applicable auditing and related professional practice standards.
  • Inspections: The PCAOB conducts regular inspections of registered public accounting firms to assess compliance with professional practice rules and standards. These inspections may identify deficiencies, including instances of potential noncompliance with SEC rules or instances of noncompliance with PCAOB rules related to maintaining independence.
  • Enforcement: If auditors violate professional practice rules and standards related to an audit, including those concerning ethics and independence, the PCAOB has the authority to investigate and take disciplinary action. This includes imposing fines, placing limitations on a firm’s ability (or that of their associated persons) to audit public companies, requiring additional professional education, and taking other measures to protect the interests of investors.

Other Resources

Stay up to date on other Investor Bulletins and Advisories on the PCAOB’s resources page.