Conflict of interest a persistent threat in auditing
- Christopher Ismael Jr.
- 6 days ago
- 3 min read
CALLS for transparency and accountability in the public and private sectors in the Philippines have grown louder in recent years. From reports of corruption and misuse of funds to questionable practices in both government and corporate offices, Filipinos are demanding fairness and integrity. Yet amid these calls, one silent but persistent threat continues to undermine public trust: conflict of interest.
In auditing, conflict of interest occurs when an auditor’s personal, financial, or professional relationships interfere — or appear to interfere — with the ability to remain objective and independent.
Independence is the lifeblood of the auditing profession. Without it, financial statements lose credibility, investors hesitate to commit, and the public begins to doubt the very systems meant to safeguard accountability.
In the Philippines, conflict of interest is challenging because of our close-knit cultural environment. Strong family ties, deep community bonds, and the value of “connections” often shape our personal and professional lives.
While these relationships strengthen social trust, they can also blur professional boundaries. Imagine an auditor in a small town asked to examine the books of a cooperative managed by family friends, or an audit of a government program conducted by someone whose relatives work in the same agency. Even in corporate settings, where large businesses and influential groups dominate, auditors are prone to subtle pressures to soften their findings.
The danger lies not only in actual bias, but also in perception. Even when auditors carry out their work with honesty, the mere appearance of favoritism or undue influence can erode public confidence. In a country where trust in institutions is fragile, perception carries enormous weight.
Today, as the country strives to strengthen governance and economic growth, the role of auditors has never been more critical. Our nation has seen repeated controversies over public funds and corporate accountability, and each one chips away at confidence in the system. If auditors allow conflicts of interest to go unchecked, the damage extends beyond individual organizations. It weakens investor trust, disillusions citizens, and slows national progress.
At its heart, conflict of interest is about choice: whether we prioritize convenience and connections, or uphold the higher duty of integrity. For Filipino auditors, this is not an abstract dilemma. It is a lived reality, encountered in engagements where professional duty intersects with personal ties.
Remaining independent is rarely the easiest path, but it is always the right one. Beyond being a technical standard, independence is a moral responsibility. In a society still struggling to practice transparency, the auditor’s role goes far beyond checking numbers. It is about protecting trust— and today, that trust is more valuable than ever.
Addressing the problem head-on
If the Philippines is to move forward, conflict of interest must be addressed head-on. Audit firms must strengthen policies that identify and prevent conflicts before they compromise independence. Regulators must enforce stricter safeguards and demand full disclosure, especially where personal or financial ties are unavoidable. And as professionals, auditors must hold themselves to the highest ethical standards, even when doing so risks convenience, business opportunities, or personal relationships.
Ultimately, the fight against conflict of interest is a fight for credibility. In these times, when the public’s faith in institutions is fragile, auditors have the opportunity — and the duty — to lead by example. The message must be clear: in the Philippines today, integrity cannot be optional. It is the only way forward.
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Christopher Ismael Jr. is an audit partner at Ismael and Co. CPAs and a member of the media affairs committee of the Association of Certified Public Accountants in Public Practice (ACPAPP).
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