Revista Científica Interdisciplinaria Investigación y Saberes
2024, Vol. 14, No. 3 e-ISSN: 1390-8146
Published by: Universidad Técnica Luis Vargas Torres
How to cite this article (APA):
Egas. F., Bravo, S., Hinojosa, C., Robles, G. (2024) Responsabilidades
disciplinarias del auditor ecuatoriano para la evaluación de su comportamiento en el ejercicio
profesional, Revista Científica Interdisciplinaria Investigación y Saberes, 14(3) 45-69
Disciplinary responsibilities of the Ecuadorian auditor for the evaluation
of his/her behavior in professional practice
Responsabilidades disciplinarias del auditor ecuatoriano para la evaluación de su
comportamiento en el ejercicio profesional
Fanny Graciela Egas Moreno
Universidad Técnica Luis Vargas Torres, Esmeraldas, Ecuador
fanny.egas@utelvt.edu.ec
https://orcid.org/0000-0002-0188-6275
Santiago Rafael Bravo Simbaña
Universidad Técnica Luis Vargas Torres, Esmeraldas, Ecuador
santiago.bravo@utelvte.edu.ec
https://orcid.org/0000-0002-5994-5231
Carlos Alberto Hinojosa Ortiz
Universidad Técnica Luis Vargas Torres, Esmeraldas, Ecuador
carlos.hinojosa@utelvt.edu.ec
https://orcid.org/0000-0001-8606-2576
Gustavo Dario Robles Quiñonez
Universidad Técnica Luis Vargas Torres, Esmeraldas, Ecuador
dario.robles@utelvte.edu.ec
https://orcid.org/0000-0002-5860-6764
The Office of the Comptroller General of the State, in Ecuadorian
territory, is the institution in charge of controlling state resources
administered by public servants. For this purpose, it is essential to
have the professional service of external and internal auditors who,
through audits, guarantee the aforementioned control. The objective
of this manuscript is to analyze the disciplinary responsibilities that
concern the auditor in the professional exercise and that make it
possible to evaluate his ethical and professional behavior; through a
documentary research, with a qualitative approach and ethnographic
design. Using the interview to collect information from external
Abstract
Received 2024-03-12
Revised 2024-06-22
Published 2024-08-01
Corresponding Author
Egas Moreno Fanny Graciela
fanny.egas@utelvt.edu.ec
Pages: 45-69
https://creativecommons.org/lice
nses/by-nc-sa/4.0/
Distributed under
Copyright: © The Author(s)
Disciplinary responsibilities of the Ecuadorian auditor for the evaluation of his/her behavior in
professional practice
Revista Científica Interdisciplinaria Investigación y Saberes , / 2024/ , Vol. 14, No. 3
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auditors working in the Office of the Comptroller General of the State
of the province of Esmeraldas. The results obtained in this research
show that in the exercise of the public function, it is a priority to
comply with the legal precepts established in the national legal
framework; therefore, the government auditor must guide his work
under principles and values that regulate his actions and conduct;
comply with the duties and prohibitions assigned in the position; in
such a way that compliance with the assigned disciplinary
responsibilities strengthens confidence in the auditing profession,
guarantees the reliability of the financial information and avoids
incurring in disciplinary sanctions caused by action or omission that
affect the normal development of their attributions.
Keywords:
Disciplinary responsibilities, auditor, duties, prohibitions
Resumen
La Contraloría General del Estado, en el territorio ecuatoriano, es la
institución encargada de fiscalizar los recursos estatales
administrados por servidores públicos. Para tal efecto, es
imprescindible contar con el servicio profesional de auditores
externos e internos que, a través de las auditorías, garanticen el
referido control. El objetivo de este manuscrito es analizar las
responsabilidades disciplinarias que atañen al auditor en el ejercicio
profesional y que posibilitan evaluar su comportamiento ético y
profesional; a través de una investigación de carácter documental,
con enfoque cualitativo y diseño etnográfico. Utilizando la entrevista
para recopilar la información de parte de los auditores externos que
laboran en la Contraloría General del Estado de la provincia de
Esmeraldas. Los resultados obtenidos en esta investigación, muestran
que en el ejercicio de la función pública, es prioritario dar
cumplimiento a los preceptos legales establecidos en el marco
jurídico nacional; por lo tanto, al auditor gubernamental, le
corresponde orientar su labor bajo principios y valores que regulan su
actuación y conducta; cumplir con los deberes y prohibiciones
Disciplinary responsibilities of the Ecuadorian auditor for the evaluation of his/her behavior in
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asignados en el cargo; de tal manera que el cumplimiento de las
responsabilidades disciplinarias asignadas fortalezca la confianza en
la profesión de auditoría, garantice la fiabilidad de la información
financiera y le evite incurrir en sanciones disciplinarias provocadas por
la acción u omisión que afecten el normal desarrollo de sus
atribuciones.
Palabras clave:
Responsabilidades disciplinarias, auditor, deberes,
prohibiciones
Introduction
The definition of auditing has evolved over time and different authors
have proposed different perspectives. The modern concept, in
general, maintains fundamental aspects such as its systematic,
objective and independent character and its focus on the evaluation
of information, aspects defended in the definitions made by authors
such as Holmes (1994)Kell et al. (1995)(1995), the American Institute
of Certified Public Accountants (AICPA)(2019) and the International
Auditing and Assurance Board (IAASB) (2019) (2019). However, more
recent approaches place greater emphasis on essential aspects such
as: adding value to organizations, effective communication, risk focus
and the use of technologies; trends that reflect the evolution of the
profession towards more proactive and strategic approaches, which
seek to contribute to the overall success of organizations. In
reference, the Standards for the Professional Practice of Internal
Auditing (IPPF) of the International Organization of Internal Auditors
(IIA) that provide a comprehensive framework for the profession,
propose in the 2021 edition of IPPF its audit mission as "an objective
and independent consulting and assurance activity designed to add
value and improve an organization's governance, risk management
and control processes." (IIA, 2021). The auditing profession and
auditing as a discipline imply the acceptance of social responsibility
and to practice it requires not only technical knowledge but also
professional judgment and experience, which will be complemented
with academic preparation and continuous study to perform an
optimal quality work. (Garcia et al., 2023)
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Among the different types of auditing, government auditing, which is
the area covered by this research, is a specific type of auditing
instituted in all the countries of the region (Aguirre et al., 2020).
(Aguirre et al., 2020) which focuses on evaluating financial and
operational management and compliance with standards and
procedures in government institutions such as public agencies,
ministries, etc., whose main objective is to promote transparency,
accountability, control and risk mitigation and efficiency in the
management of public resources. In the context of the Ecuadorian
nation, government audit is defined in the Organic Law of the
Comptroller General of the State ( LOCGE ), in its Article 4, numeral
1 where it states that: "It is an integrated process of advice, assistance
and risk prevention, through a critical examination of the actions of
public servants, in the exercise of their functions, in order to verify
compliance with the legal, regulatory, contractual provisions and the
principles of economy, efficiency and effectiveness, evaluating the
reasonableness of policies, plans, programs, projects, activities and
results of public management, with the purpose of contributing to the
improvement of the same (National Congress, 2017).
This evaluation, or also called advisory system, assistance and risk
prevention as defined in the preceding paragraph, is developed by
the Auditor, which according to ISO 19011:2002 defines it as "a
person with the competence (personal attributes, as well as aptitude
in the application of knowledge and skills) to carry out an audit"
(International Organization for Standardization, 2002). (International
Organization for Standardization, 2002). In line with the
aforementioned ISO standard the IIA definition focuses on the
auditor's competencies and role in providing assurance on the
effectiveness of an organization's governance, risk management and
control processes by defining its mission as "To enhance and protect
the value of the organization by providing assurance, advice and
analysis on a risk basis."(IIA, 2024). While the Association of Chartered
Certified Accountants (ACCA) in its Code of Ethics and Conduct sets
out fundamental principles of ethics for professional accountants,
reflecting the profession's recognition of its public interest
responsibility, where the principles of integrity, objectivity,
professional competence and due care, confidentiality and
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professional behavior set the standard of conduct expected of a
professional accountant (ACCA, 2023).
On the one hand, these definitions highlight the importance of
auditors in maintaining independence, objectivity, transparency,
efficiency and risk mitigation within organizations, either by ensuring
compliance with regulations, identifying operational inefficiencies or
safeguarding assets, thus playing a crucial role in promoting effective
governance and control, and on the other hand, they identify the key
characteristics of an auditor. Therefore, it can be established that the
auditor is a professional who, by contrasting the information available
to him on the period evaluated with the applicable regulations, issues
the appropriate inconsistencies, non-compliances and shortcomings
that should be promptly improved; hence, the role of the auditor is
prone to continuous improvement of the circumstances detected,
especially if the government sector is concerned, thus responding to
the constant need to ensure public resources.
In Ecuador, the Office of the Comptroller General (CGE) is in charge
of supervising public goods, guaranteeing citizens the effective use
of resources (Vásquez et al., 2023).(Vásquez et al., 2023)..
Government institutions and all those that have the use of public
resources are governed by a conglomerate of laws, rules, codes,
regulations, agreements, instructions, manuals, guides, among
others, which standardize the guidelines regarding the use of
material, economic and intangible resources, as well as human talent,
to ensure the proper functioning and destination of the General State
Budget.
It is for this reason that, in the exercise of auditing under a state
dependency relationship, legal provisions such as the LOCGE, the
Organic Law of Public Service (LOSP) and its General Regulations, the
Substitute Internal Regulations for the Administration of Human
Resources of the CGE and the Internal Regulations for Occupational
Safety and Health, among others, must be complied with regardless
of what corresponds to the public servant. Therefore, the functions
performed by the tax auditor are considered to be highly important
and delicate, and any adverse circumstance could violate them; for
this reason, the auditor in his professional development must meet
and practice a series of principles and values that guide and regulate
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his actions, behavior and conduct; abide by the duties and
prohibitions stipulated during his term of office; so as to avoid
committing infractions that generate disciplinary sanctions that affect
his personal and institutional image, including the removal from office
through a process of dismissal.
From the foregoing it is possible to foresee the relevance of defining
the disciplinary responsibilities of the auditor for the evaluation of his
behavior in the professional practice. On the one hand, to establish
the ethical and legal consequences he/she would face in the event of
misconduct or non-compliance in the performance of his/her duties
and, on the other hand, and crucially for the protection of the public
interest, to promote ethics and professionalism, ensure the quality of
audits, deter misconduct and allow the investigation and sanctioning
of infractions.
The International Standards on Auditing (ISAs), issued by the
International Auditing and Assurance Standards Board (IASB)
establish the minimum requirements that auditors must comply with
when performing audits of financial statements. The ISAs are divided
into two main categories: general responsibility standards and
specific responsibility standards. The former apply generally to all
aspects of the audit, from planning to the issuance of the final audit
report, and the latter apply to specific areas of the audit, such as the
assessment of fraud risk and the audit of specific transactions.
The most important auditor responsibility standards include:
ISA 200: Overall Objectives of the Auditor and the Conduct of an
Audit Using a Risk-Based Approach: States that the overall objective
of an audit is to obtain reasonable assurance about whether the
financial statements are free from material misstatement, whether
caused by fraud or error.
-ISA 240: Auditor's Responsibilities for the Audit of Financial
Statements with respect to Fraud: States that the auditor should
consider the risk of fraud in performing the audit and should take
appropriate steps to detect and prevent fraud.
-ISA 330: Audit procedures related to unaudited financial
information: Establishes that the auditor should obtain sufficient
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appropriate evidence about the unaudited financial information
presented in the financial statements.
-ISA 700: Form and content of the modified audit opinion:
Establishes the requirements for the issuance of a modified audit
opinion, which is issued when the auditor has been unable to obtain
reasonable assurance about whether the financial statements are free
of material misstatement.
Each of these standards is underpinned by fundamental ethical
principles and values that set the standard of conduct expected of
auditors, including the:
1. Integrity: Auditors must be honest and transparent in their work,
avoiding any conflict of interest.
2. Independence: Auditors should remain free from influences that
may influence their professional judgment and compromise their
objectivity in the audit process.
3. Objectivity: The auditor should be objective in conducting the
audit and should not allow his or her professional judgments to be
influenced by bias or conflicts of interest.
4. Accountability: The auditor is accountable to the client,
regulators and the general public for the performance of his work.
5. Competence and professional diligence: Auditors must possess
the necessary knowledge, training, skill and experience to perform the
audit competently and effectively, complying with the established
deadlines and standards.
6. Confidentiality: Auditors must respect the confidentiality of
information obtained during the audit and not disclose it without
authorization.
7. Professional care: Auditors should perform the audit with due
care and attention, applying procedures and techniques rigorously.
This means that they should take all prudent steps to obtain
reasonable assurance that the financial statements are free from
material misstatement.
Therefore, when referring to the disciplinary responsibilities, it is
important to precede on the conduct that the professional auditor
must have in the exercise of his functions, and with that, the approach
of the ethical guidelines that occupy an essential starting point. In
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relation to the auditor's ethics Garban(2023) concludes that "The
implications in the auditor's ethical conduct and impact on the
organization are related to a series of theoretical, practical and
spiritual considerations, by enshrining personal and professional
values and those of the audit in terms of trust, commitment,
responsibility, suitability, domains of the ethical sensitive being,
facing the reality of scenarios in which decisions must be made
attached to the ethical character".
For Rodriguez and Fabbroni (2021) when the auditor's behavior is
unethical and unprofessional, he may fall into different areas of
responsibility: civil, criminal and professional These classifications of
disciplinary responsibilities by type (criminal, civil and administrative
or professional) are based on the characteristics of the facts and the
seriousness of the faults or breaches during the exercise of his
profession and in correspondence with the laws:
1. Criminal liability: Auditors may face criminal liability if it is
proven that they have committed a crime in the exercise of their audit
functions, such as falsification of documents, fraud, or gross
negligence resulting in significant losses to the audited company or
third parties.
2. Civil liability: In the event that an auditor makes errors or
omissions in their work that cause damage to the audited company or
third parties, they may be civilly liable for the damages caused. In this
case, they may have to financially compensate the affected parties.
3. Administrative liability: Auditors may also be subject to
administrative liability, for example, if they violate specific regulations
related to the audit profession, such as non-compliance with ethical
standards, lack of independence, or failure to comply with legal
requirements for conducting an audit.
It should be noted that these responsibilities and their classification
may vary depending on the context and regulatory framework in
which they operate. Therefore, it is essential for auditors to be familiar
with the laws and regulations that apply to them in their jurisdiction
to avoid potential legal consequences.
It was previously mentioned that auditors have the duty to perform
audits in an impartial and professional manner, following established
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auditing norms and standards. Failure to comply with their
responsibilities as auditors, which may lead to misconduct or non-
compliance, errors or fraud in their work, may lead to legal and
professional sanctions during the exercise of their profession.
Therefore, it is mentioned that the disciplinary responsibilities of
auditors are closely related to sanctions.
Penalties for auditors may vary depending on the seriousness of the
offense committed. These sanctions may include fines, suspension of
license to practice as an auditor, lawsuits and even the definitive loss
of the professional license. Hence the importance of knowing and
fulfilling their responsibilities in an ethical and professional manner to
avoid facing sanctions that may affect their reputation and
professional career. Consequently, defining the auditor's disciplinary
responsibilities in a clear manner becomes very important in order to
establish the set of rules and procedures that establish the legal or
ethical consequences that auditors may face in the event that they
incur in misconduct or non-compliance during the exercise of their
profession. For various reasons, responsibilities oriented to the
auditors are mentioned as crucial:
1. Protecting the public interest: The main reason is to protect the
public interest and ensure confidence in the auditing profession.
Auditors play a fundamental role in society by verifying the reliability
of financial information, which is used by various stakeholders, such
as investors, creditors, governments and the general public. If
auditors do not fulfill their responsibilities in an ethical and competent
manner, confidence in financial information is eroded, which can have
serious economic and social consequences.
2. Promoting ethics and professionalism: Disciplinary
responsibilities serve as a framework for the ethical and professional
conduct of auditors. By establishing consequences for inappropriate
behavior, auditors are encouraged to act with integrity,
independence, objectivity and accountability. This helps to raise the
standards of the profession and to ensure that auditors perform their
work with due care and diligence.
3. Ensure audit quality: Defining the disciplinary responsibilities of
the auditor helps maintain audit quality. A clear system of sanctions
for auditors who do not comply with their obligations motivates them
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to perform high quality work, following established standards and
procedures. This contributes to the timely detection of errors or fraud
in the financial statements, protecting the users of financial
information.
4. Deterring misconduct: Disciplinary responsibilities act as a
deterrent to auditors from engaging in misconduct. By knowing the
potential negative consequences of their actions, auditors are less
likely to commit errors, omissions or acts of bad faith. This helps
maintain the integrity and reputation of the auditing profession.
5. Enable the investigation and sanctioning of violations:
Establishing auditor disciplinary responsibilities allows regulatory and
professional bodies to investigate and sanction infractions committed
by auditors. This ensures that those who do not comply with the rules
and principles of the profession are duly sanctioned, which
contributes to maintaining discipline and order within the profession.
In summary, it is possible to state that defining the auditor's
disciplinary responsibilities is essential because it contributes to
strengthening confidence in the auditing profession and ensuring the
reliability of financial information. Different studies provide evidence
from analytical or historical research on the impact of auditor
responsibility on audit quality. Analytical studies have shown that
audit quality generally increases when the risk of liability increases
(Liao & Radhakrishnan, 2020).. Such results support that an increase
in auditor accountability is a frequently suggested measure to
improve both actual and perceived audit quality(Quick et al., 2023).
All of the above shows that the disciplinary responsibilities of auditors
can be diverse and vary from country to country and from one
regulation to another, depending on factors such as local legislation
in force, the regulations of the profession and international standards.
In the particular case of government audits, the auditor is responsible
for examining and evaluating the financial, administrative and
compliance operations of governmental entities. Some of the specific
responsibilities of the auditor in government audits include:
1. Review and evaluate the design and implementation of the
government entity's internal controls.
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2. Verify the accuracy, completeness and reasonableness of the
financial and operating information presented.
3. Evaluate compliance with laws, regulations and policies
applicable to the government entity.
4. Issue audit reports reflecting its findings, conclusions and
recommendations.
5. Communicate clearly and effectively with the auditee and
relevant stakeholders.
6. Maintain independence and objectivity in the performance of
the audit, avoiding conflicts of interest.
7. Comply with the standards of ethics and professionalism
required for the practice of auditing.
The Constitution of the Republic of Ecuador (National Assembly,
2008)The Constitution of the Republic of Ecuador (National Assembly,
2008) grants powers to the CGE, as the only technical body in charge
of auditing public resources administered by state entities and legal
persons under private law. As part of these functions, it is responsible,
through the execution of external and internal audits, for establishing
administrative and civil liabilities and criminal presumptions. This
activity is carried out by auditors who are highly qualified and qualified
to perform such work.
With regard to the governmental sphere, and with this, the provision
of services to the citizenry, the exercise of ethical conduct; "to
exercise the profession or trade subject to ethics" (National Assembly,
2008). (National Assembly, 2008) It is a moral duty of all Ecuadorians,
as established in the Constitution. Therefore, in the behavior and
actions of the public auditor, his personal values must prevail, as well
as his vocation of service, the ethical precepts established by the
institution for which he works, since, as far as auditing is concerned, it
is presented through the Code of Ethical Conduct (Office of the
Comptroller General of the State, 2021)the official provisions that
correctly guide the auditor's role.
Methodology
This scientific product conforms to a documentary research (Arias,
2012)It is based on the search, recovery, analysis, criticism and
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interpretation of information obtained from documentary sources,
i.e., the current Ecuadorian legal framework, as well as the criteria of
authors who have addressed the subject; and, on the other hand, from
live sources, through the contribution generated by the public officials
under study.
With regard to the approach, it is based on qualitative (Hernández et
al., 2014) which consists of the construction of an inductive process,
starting then, from the principles and values that guide and regulate
the actions and conduct of the auditor in the professional practice,
through the applicable regulations such as the Code of Ethical
Conduct of the CGE, to the legal provisions that establish disciplinary
responsibilities for non-compliance, or affectation to ethical behavior,
in this case, the LOSP and its General Regulations, to finally reveal
new questions or redefine them, when found in the universe
subjected to the analysis.
On the other hand, the applied design is ethnographic (Hernández et
al., 2014)The purpose of this study is to investigate, understand,
describe and explain from the perspective or points of view of the
external auditors, in terms of the exercise of the function, which
depending on their performance may receive disciplinary
responsibilities.
The information gathering technique was the interview, based on
general questions, starting with global approaches, such as the
contribution of ethics to the auditor's professional practice, to the
approach of specific cases in which disciplinary sanctions have been
applied to the auditor; the same duly grounded was directed to the
external auditors of the province of Esmeraldas who provide services
in the CGE.
Results
The Constitution of the Republic of Ecuador, as the supreme law that
governs the entire Ecuadorian territory, prevails over any legal
provision, i.e. the hierarchical order of laws must be considered, which
therefore should not conflict with the precepts and guidelines that are
enshrined in the aforementioned magna carta. 7 of the LOCGE as part
of the General Regulatory Framework is responsible for regulating the
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functioning of the State Control, Control and Audit System and in its
function it will adapt, issue, approve and update, among others, the
Policies and Standards for government auditing; as well as the rules,
regulations, general and specialized manuals, methodological guides,
instructions and other provisions necessary for the application of the
system and the determination of responsibilities.
Basic Government Auditing Standards applicable to the auditor
Within the Basic Standards of Government Auditing, the LOCGE
establishes in Section 2, Article 25, the independence of the audit
staff, based on the total independence of the government auditor
with respect to government institutions and the persons and activities
subject to its examination. Limiting their practice as auditors in State
institutions in which they have rendered their services within the last
five years, except in the case of the practice of their profession as
internal auditors. As well as the execution of audits in activities carried
out by their spouse, or by their relatives within the fourth degree of
consanguinity or second degree of affinity, or when there is a conflict
of interest. (National Congress, 2017).
The independence of government auditors is the most important
requirement for the practice of the profession, the questioning of
which diminishes the credibility of the results and eliminates the
validity of the report. Independence in their comments, opinions,
conclusions and recommendations express their impartiality and
should be considered as such by third parties. The existence of
independence in their criteria and way of acting implies observing a
fair, ethical and moral conduct as well as an objective attitude, which
implies that their work is carried out with honesty in an environment
of trust that does not compromise the quality of the audit.
Determination of responsibilities. Duties and attributions applicable
to the auditor
The LOCGE, with respect to the determination of responsibilities of
audit personnel, establishes the duties and powers of public servants
involved in the processes of government auditing, predetermination
or glossing and the determination of civil liabilities or indications of
criminal liability. These duties and attributions are set forth in Art. 79:
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To perform its duties with independence, professionalism and
objectivity, in accordance with the legal system, especially with the
provisions of this Law, the auditing standards, the respective Code of
Professional Ethics, the regulations and other provisions issued by the
CGE;
To apply constitutional guarantees in the predetermination and
determination of administrative and civil liability and indications of
criminal liability;
To keep the facts known to them in the performance of their duties
confidential and, in the case of information subject to secrecy or
confidentiality, to use it only for the purposes provided by law; and,
As the case may be, report immediately, in writing, to their
hierarchical superior, on the commission of any serious misconduct or
criminal act that they verify on the occasion of the performance of
their duties.(National Congress, 2017)
The above standards of behavior refer to the expected and required
characteristics applicable to the auditor for the performance of the
audit work and the quality of its work.
The Code of Institutional Ethical Conduct (Office of the Comptroller
General of the State, 2021) establishes the principles and values for
the correct exercise of the profession of external auditors of the CGE,
as shown in Table 1.
Table 1.
Principles of CEM
Principles
Definition
Control,
prevention and
fight against
corruption
To promote a responsible, transparent and equitable
exercise of functions; to promote and encourage
citizen participation; to protect the exercise and
fulfillment of rights; and to prevent and combat
corruption.
Legality
To know, respect and act in accordance with the
Constitution of the Republic of Ecuador, the laws,
regulations, and other provisions that regulate the
activity in any area in which they work.
Social Benefit
To privilege the service to the interests of the citizens,
in the control of the good use of public resources,
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within processes that favor efficacy, efficiency and
effectiveness.
Impartiality and
autonomy
To act objectively in the fulfillment of their
responsibilities, without yielding to pressures of any
kind, and with absolute independence, so that their
reports are impartial, and thus are perceived by
society as a whole.
Source: Own elaboration (2022). Taken from CEM's Code of Ethical
Conduct.
In context, it can be inferred that the principles defined by the CGE,
in its Code of Ethical Conduct, adequately respond to its institutional
mission "To control public resources to ensure their efficient use for
the benefit of society" (Office of the Comptroller General of the State,
2020b).(Office of the Comptroller General of the State, 2020b).It is
important to emphasize that government auditors, in addition to
knowing them, must practice them as part of their daily actions in the
development of their attributions and interpersonal relationships
between internal and external users of the entity; concomitant with
the values that are an intrinsic part of the human being.
Consequently, the values set forth in CGE's Code of Ethical Conduct
are mandatory for external and internal auditors, as shown in Table 2
below:
Table 2.
CEM values
Values
Definition
Integrity
Act honestly, reliably, in good faith and in the
public interest.
Independence and
objectivity
Be free from influences or circumstances that
compromise or could be seen as compromising
professional judgment, and act impartially and
objectively.
Competition
Acquire and maintain knowledge and skills
appropriate to the role, act in accordance with
applicable standards and with due care.
Professional
behavior
Comply with laws, regulations and conventions,
and avoid any conduct that may bring CEM into
disrepute.
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Confidentiality and
Transparency
Protect information in an adequate manner,
balancing this action with the need for
transparency and accountability.
Source: Own elaboration (2022). Taken from CEM Code of Ethical
Conduct.
As can be seen, rectitude in the professional actions of the
government auditor is due to the values that theoretically prevail in
the institutional normative precepts, which must be put into practice
through the observance by the human talent that make up the
different institutional dependencies.
Each auditor, during his period of management, must perform and
comply with the duties indicated in the respective regulations, the
same that guide people to develop what they can and must do in the
exercise of their competencies; as well as the prohibitions that limit
any act or action in which they must not be involved; both (duties and
prohibitions) established, approved and disseminated by the
institution or organization, in which the professional provides his
services under a relationship of dependence, must be fully known.
In this regard, the duties of government auditors in Ecuador, in
accordance with Article 25 of the Internal Substitute Regulations on
Human Talent Management, are as follows (Office of the Comptroller
General of the State, 2020a), to fully abide by the institutional
regulatory compendium and others that are part of the national legal
system; citing as an example the LOSP, the LOCGE, its Regulations
and the Code of Ethical Conduct, or any legally approved provision
of mandatory compliance, so that:
In accordance with the social benefit, which is part of the institutional
principles, the government auditor must carry out all the
responsibilities determined by the position and the workday; inform
his immediate supervisor of any act that damages the institutional
image; safeguard and safeguard the resources under his charge; and,
in the event of absence from his duties, he must request permission
in a timely manner.
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On the other hand, participate in courses, workshops, seminars or
congresses duly planned by the Human Resources Management Unit;
maintain confidentiality, prevent the misuse or theft of information
under his/her responsibility; and comply with the dates stipulated in
any assigned activity.
In addition, for official reasons, the auditor must present his or her
identification card; respect all employees of the institution at any
hierarchical level; update his or her personal information when there
are changes; comply with the institution's medical program and the
provisions of the CGE's Internal Health and Safety Regulations; make
use of the Information and Communication Technologies ICTs for
institutional work; use the institutional uniform correctly; register his
or her entry and exit in the biometric system; be present at entity
events; and other duties set forth in the LOCGE.
In reference to the prohibitions that limit professional actions, the
aforementioned Internal Substitute Regulation for Human Talent
Management, Article 27, states that the government auditor has the
following restrictions: to miss work without justification; to consume
alcohol or drugs in the institutional area; and to smoke in areas that
have not been declared smoke-free.
Regarding their work occupations, they must refrain from requesting
from users documentation not contemplated by the entity; exposing
institutional matters to the media, without the approval of the
Comptroller General of the State; influencing or interfering in
decisions of the institution; using inappropriately, or taking
possession of material resources and equipment that the Comptroller
General's Office has, including work identification, in case of using it
for personal purposes; sustaining inconsiderate behavior with their
superiors, colleagues, and even with external users.
In addition, the auditor must not carry out actions that could
jeopardize his functions or affect the institutional image; provide
information of an official nature without prior authorization; develop
acts of refusal without justification, before work orders, or designated
activities; the auditor is also prohibited from performing particular
acts during his working day, and even if he is in additional hours.
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In addition to the above, the auditor must not make use of multimedia
reproduction devices in the institutional area during working hours;
maintain any kind of responsibility in the personal records of the
Comptroller's Office database; and finally, it is forbidden to do
anything that, in the LOCGE and other applicable legal provisions, is
stipulated as appropriate.
As external auditors belonging to the Ecuadorian public sector, the
disciplinary regime is regulated in the LOSP and its General
Regulations, so they may incur administrative liability when they fail
to comply with their obligations or contravene legal provisions, which
will result in the application of an administrative sanction imposed by
the highest authority and executed by the Human Resources
Management Unit, which will be recorded in writing in the auditor's
personal file, in accordance with the basic guarantees of the right to
defense and due process.(Presidency of the Republic of Ecuador,
2011).
Disciplinary offenses are originated by the actions or omissions of the
external auditor, as a result of the violation of the legal regulations in
force in the country, which will allow the sanction to be classified as
follows:
Table 3.
Classification of disciplinary offenses
Type of fault
Slight
Graves
Source: Own elaboration (2022). Taken from the LOSP and its
Regulations
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More detailed information is shown in Table 3, which compiles the
conceptualization of minor offenses as established in the LOSP, in
accordance with the Internal Substitute Regulation for Human Talent
Management.(Office of the Comptroller General of the State,
2020a)issued through Agreement No. 014-CG-2020 of July 8, 2020,
the following are considered minor offenses for CGE government
auditors:
Table 4.
Minor offenses
Unexcused
absence of one to
two consecutive
days.
Being unjustifiably late more
than three times in a month.
Failure to record
daily attendance on
the biometric clock.
Failure to wear the
institutional
identification card
during the regular
workday.
Misuse of materials, supplies,
equipment and office supplies.
Using computer
tools for private or
personal purposes.
Causing delay in
the route of the
Institution's
transportation
vehicles.
Failure to attend in uniform or
incomplete uniform.
Smoking or keeping
lit tobacco products
in areas of the
Institution.
Carrying out
activities of a
private,
professional or
commercial
nature outside of
their duties during
the workday.
Failure to show due
consideration and courtesy to
superiors, colleagues,
subordinates or the public in
general.
Unjustifiably
delaying or denying
the dispatch of
official business.
Failure to comply
with the
established
procedure for
obtaining and
justifying per
diem and
mobilization
expenses.
Failure to comply with the
provisions established in the
Internal Occupational Health
and Safety Regulations.
Failure to attend
scheduled training
and education
events.
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Failure to attend
official events
convened by the
Institution.
Failure to report changes in
data necessary to keep files up
to date.
Failure to abide by
and submit to
internal
administrative
policies and
procedures.
Source: Own elaboration (2022). Taken from CEM's Substitute
Internal Regulations for Human Talent Management.
According to the Regulations to the LOSP(Office of the President of
the Republic of Ecuador, 2011)According to the Regulations to the
LOSP (Presidency of the Republic of Ecuador, 2011), sanctions shall
be imposed in accordance with the misconduct committed, whether
minor or serious, being in order of severity: verbal warning; written
warning; administrative pecuniary sanction; temporary suspension
without pay; and dismissal.
In order to address the implications of each sanction, Table 5 shows
the manner in which each sanction will be imposed on the employee.
Table 5.
Type of sanction
Type of sanction
Description
Verbal reprimand
when he/she disobeys his/her
duties, obligations and/or the
provisions of the institutional
authorities.
Written reprimand
when in the period of one
calendar year he/she has been
sanctioned twice with a verbal
warning, a written sanction for
minor offenses is applicable.
Administrative pecuniary
penalty
when he/she commits repeated
offenses that have provoked a
written warning on two occasions
within a calendar year, the
administrative pecuniary sanction
imposed shall not exceed ten
(10%) percent of the unified
monthly remuneration.
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Temporary suspension
without pay
when he/she fails to comply with
the duties set forth in Article 22 or
incurs in the prohibitions set forth
in Article 24 of the LOSEP, he/she
may be sanctioned with
temporary suspension without
pay, not to exceed thirty days.
Removal
in the cases indicated in Article
48 of the LOSEP, after
compliance with the
administrative summary
procedure. Dismissal is the
maximum administrative
disciplinary sanction within the
public service and shall be
imposed only by the appointing
authority or its delegate.
Source:
Own elaboration (2022). Taken from the LOSP
As evidenced in Article 59 of the CGE's Substitute Internal
Regulations for Human Resources Management (Office of the
Comptroller General of the State, 2020a)According to Article 59 of
the Substitute Internal Regulations for Human Resources
Management (Comptroller General's Office, 2020a), tax auditors who,
in the exercise of their duties, allow the breach of their obligations or
failure to comply with the legal provisions they are required to comply
with, may be judged through the administrative disciplinary system,
and may even incur in administrative, civil or criminal liability,
depending on the seriousness of the offense committed.
The disciplinary measure to be applied must guarantee compliance
with due process, inasmuch as the public auditor must exercise his
right to defense, and therefore the authorities and other employees
of the CGE are obliged to respect legal certainty and the principle of
legality, as set forth in Articles 82 and 226 of the Constitution of the
Republic of Ecuador, from which it follows that administrative activity
may not infringe the legal norms that govern the Ecuadorian State.
Incurring in any of the disciplinary offenses established in the LOSP of
the Public Service, leads to the establishment of the following
sanctions:
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Table 6.
Imposition of sanctions
Minor offenses
It will result in the imposition of sanctions of
verbal reprimand, written reprimand or
administrative pecuniary sanction or fine.
Serious
misconduct
It shall give rise to the imposition of
sanctions of suspension or dismissal, after
the corresponding administrative inquiry.
Recidivism of minor offenses shall be
considered a serious offense.
Source:
Own elaboration (2022). Taken from LOSP.
For the application of the sanctions of verbal reprimand, written
reprimand, administrative pecuniary sanction and dismissal, it is up to
the authority, official or servants of the control body to apply the
procedure established for the application of sanctions. The sanctions
of temporary suspension without pay and dismissal, merit the
application of an administrative summary, initiated by the highest
authority or its delegate, which for this purpose is the Comptroller
General of the State, who complying with due process, enshrined in
the Ecuadorian supreme law, must formally notify the Ministry of
Labor.
Conclusions
Servants in the exercise of the public function, who fulfill the roles of
external and internal auditors in the entities of the governmental
sector, must abide by the guidelines, directives, guidelines or basic
guidelines established in the Ecuadorian legal system, especially since
they perform a process of control and supervision through audits or
special examinations that they execute, which motivates them to
practice the competencies and powers that are attributed to them in
the constitution and the law.
In order to achieve consistent, ethical and quality work on the part of
government auditors, it is vitally important that they internalize and
practice a behavior based on principles and values that guide and
regulate their actions and conduct in the professional practice, as well
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as strictly perform the duties assigned to them, together with the
mandatory compliance and observation of the prohibitions in the
professional practice.
The actions or omissions committed by them, especially when they
make possible the breach or violation of a legal provision, may be
subject to administrative sanctions, which may lead to the initiation of
disciplinary proceedings by the competent authority, by means of
verbal reprimand, written reprimand, administrative pecuniary
sanction, temporary suspension without pay and dismissal, subject to
respect for the basic guarantees of due process, i.e., legal certainty
and the principle of legality.
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