An Integrated system to reform world financial crisis by facilitating EU auditing license test with virtues evaluation

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1 An Integrated system to reform world financial crisis by facilitating EU auditing license test with virtues evaluation KIRIAFINI PANAGIOTA BA Faculty Technopolis Campus, Kozani police. gr DIMITRIOS ZISSOPOULOS BA Faculty Technopolis Campus, Kozani gr police. gr KARTALIS NIKOS Economics Faculty Ellas teikoz.gr NIKOS SARRIANIDIS BA faculty KOSTAS TSIORAS Economics Faculty Ellas teikoz. gr Abstract: - European Union defined professional ethics as on of the test necessary to auditing professional license. All Auditing chartering bodies and companies are unique responsible for the world financial crisis. Crisis is not a crisis but a punishment according to a prophecy from Damascenus defined 237 virtues years ago and we incorporated these virtues into a EUDIT system. Apart from the euphemism it tests professional ethics, the tenth EU commandment of auditing license. Three subsystems are in in development now: University Lecture, Curriculum Analysis, Linguistics investigation and Forensic Investigation. Key-Words: - Auditing, Software Design and Development, Internet fraud, Authoring Tools and Methodology, Collaborative Knowledge Construction, Computational linguistics, ISSN: ISBN:

2 1 EU Directive for statutory audit EU directive for auditing profession describes accurately the following: in Article 4: The competent authorities of a Member State may grant professional ethics and independence only to natural persons or firms of good repute In article 8: a) general accounting theory and principles; (b) legal requirements and standards relating to the preparation of annual and consolidated accounts; (c) international accounting standards; (d) financial analysis; (e) cost and management accounting; (f) risk management and internal control; (g) auditing and professional skills; (h) legal requirements and professional standards relating to statutory audit and statutory auditors; (i) international auditing standards; (j) professional ethics and independence. We focus only to article 10. [ 3] 2 World Financial Crisis (=Judgment) I have to appose a significant answer to a letter that explains today s world financial crisis and find the solution that world leaders and scientists are looking for.: The crisis is a Greek word, and means trial (judgment). John (5,22) writes: «αλλά την κρίσιν πάσαν δέδωκε τω υιώ» (=all crisis gaven to the SON) and «νυν κρίσις εστί του κόσµου τούτου», (=now crisis is over this world). Until now the European populations used the word trial, instead of the word crisis, whenever disasters are busrted into. Now a new word replaced the old, and comprehensible he became incomprehensible. When flood, war or fell epidemic, earthquakes, drowning and other disasters are appear, people said : Divine trial!. And this means: crisis through droughts, crisis through floods, through wars, through epidemics etc. Our current financing difficulty is considered by the people as a Divine judgment, although it is only the world financial crisis. So you ask me for the cause of actual crisis, or actual Divine trial! The cause for the droughts, the floods, the epidemics and other whippings of our generation are the cause for the financial crisis. The apostasy of persons from the God. Humanity caused this crisis, and the God it allowed, so that it wakes up the persons, to make conscious, intellectual and turn to them into Him. In our modern sins-modern will be the crisis. And indeed the God used in a modern way in so that realize him modern persons: it struck the banks, the grants, economies, the stock exchange. He overthrown the table of transactions in the all world, as He did in the temple of Jerusalem. He caused unusual panic between tradesmen. It caused confusion and fear. He made all these in order to wake up the proud small heads of wise men of Europe and America, in order to self-realize their position. And from the comfort of their harbors of material certainty to remember their souls, to recognize their anomy and to kneel Paramount God, the live God. Up to when will last the crisis? As long as the spirit persons it remains without change. Until the profound guilty of this crisis they resign in front of Omnipotent. Until the persons and the populations remember, the non understandable word crisis, they translate in their language, and penitence they shout: the divine trial! However the above apposition is neither mine nor even from our century. It belongs to Velimirovic Nicholas bishop of Ohrid, a town few kilometers from my Kozani university homecity. It was written a century ago 1929 as an answer to a spiritual child of saint Nicholas. [ 17]. He also declared a similar statement at Ecumenical Council during the inter- Orthodox commission that was held in 1930 at Vatopedi Monastery on Mount Athos. [18]. The above exact words describe the recent financial arrhythmia of world economy. Financial auditors was the only vehicle of the God judgment. For years they violated all kind of regulations and they only kneel to money. We propose to apply the above wise words in European auditing as a major next step. 3 Virtues Definition The man and his virtues is a very old story. Started as a fairytale when Hercules chosen the virtue road. The serious dominating version of A.C. times belongs to Petros Damascenus as interpreted by others: [ 5,6 ]. There are 237 virtues in four main areas. All above 237 virtues was very difficult to translated in common English. There are a lot of reasons for this complexity: The Hellenic language domination in this field, Christianity schism, pure dogmatic issues but most of all the inability to attempt such a difficult translation without my spiritual father blessing. ISSN: ISBN:

3 3.1 Personal virtues 227-Αγαθότης, 182-Αγάπη, 215-Ακακία, 204- Ακατακρισία, 217-Ακεραιότης, 202-Αλήθεια, 208- Ανεξικακία, 224-Ανοχή, 231-Απάθεια, 203- Απεριεργία, 194-Απερπερία, 205-Άφεσις των οφειλομένων, 183-Βουλή, 212-Γλυκύτης, 228- Διάκρισις, 235-Διδασκαλία ως δει, 181-Δικαιοσύνη, 187-Ειρήνη, 186-Ελεημοσύνη, 206-Επιείκεια, 190- Εργασία των καλών, 223-Ευγνωμοσύνη, 214- Ευθύτης, 196-Ευπείθεια, 233-Ευσπλαχνία, 201- Ευτολμία, 218-Ευφημία, 213-Ημερότης, 216- Ηπιότης, 200-Θάρσος, 184-Ισχύς, 220-Καλοεργία, 219-Καλολογία, 189-Καρτερία, 191-Κόπος, 225- Μακροθυμία, 198-Μεγαλοψυχία, 192-Μόχθος, 236- Νουθεσία και παραίνεσις σύμμετρος και βιαστή, 232-Οικτιρμός, 237-Ομολογία, 211-Ομόνοια, 199- Παράστασις, 222-Ποίωσις, 185-Πραότης, 221- Προτίμησις του πλησίον, 193-Σεμνότης, 197- Συμβουλή, 209-Συμπάθεια, 230-Το ευπροσήγορον, 229-Το ευπρόσιτον, 195-Υπακοή, 188-Υπομονή, 210-Φιλαδελφία, 234-Φιλανθρωπία, 207-Φροντίς, 226-Χρηστότης, 3.2 Virtues to God 32-Αίτησις, 16-Αποταγή του διαβόλου, 51- Βασιλεία, 4-Γνώσις, 29-Γονυκλισία, 31-Δέησις, 35- Δοξολογία, 9-Εγρήγορσις, 44-Έκτασις προς Θεόν, 33-Έντευξις, 36-Εξαγόρευσις, 27-Εξομολόγησις, 49-Έπαινος του Θεού, 23-Επίγνωσις, 14-Επιστροφή προς Θεόν, 12-Ευλάβεια, 3-Ευσέβεια, 26- Ευχαριστία, 10-Ζέσις Πνεύματος, 21-Ζήλος θείος, 37-Θεία ζήτησις, 22-Θεία μέριμνα, 46-Θείος έρως, 41-Θείος πόθος, 47-Θεού ενοίκησις, 8-Θέρμη, 40- Θεωρία, 28-Ικεσία, 42-Καθαρά προσευχή, 7- Καθαρότης καρδίας, 18-Καθαρότης συνειδήσεως, 38-Κατά Θεόν κοινωνία, 13-Μεταμέλεια, 11- Μνήμη, 19-Μνήμη θανάτου, 43-Νηπιότης εν Χριστώ, 30-Παράκλησις, 6-Πένθος, 1-Πίστις, 25- Προσευχή, 39-Στοργή κατά Θεόν, 15-Συνταγή Χριστού, 5-Συντριμμός, 20-Σχολή κατά Θεόν, 45- Τελειότης εν Χριστώ, 17-Τήρησις εντολών, 34- Υμνωδία, 48-Φιλοθεΐα, 2-Φόβος, 50-Χάρις, 24- Ψαλμωδία 3.3 Social Virtues 112-Αγιασμός, 175-Αγιωσύνη, 114-Αγνεία ψυχής, 76-Αγρυπνία, 119-Αγχίνοια, 96-Αγών, 127- Αδημονία, 69-Αιδώς, 62-Αίσθησις, 136- Ακενοδοξία, 88-Ακτημοσύνη, 95-Αλουσία, 135- Αμεριμνία εκ πάντων, 115-Ανάγνωσις δια Χριστόν, 161-Αναιχμάλωτος λογισμός, 54-Ανδρεία, 144- Απλότης, 138-Απλότης ψυχής, 85-Αποταγή των βιοτικών, 71-Αποχή κακών, 148-Απροσπάθεια, 178- Αρετή, 91-Άρνησις εαυτού, 171-Αρπαγή νοός, 155- Ασφάλεια, 150-Αταραξία, 80-Αυτάρκεια, 84- Αφιλαργυρία, 139-Αφιλενδειξία, 137-Αφιλοδοξία, 170-Αψευδής έλλαμψις, 103-Γαλήνη, 99-Γυμνότης, 156-Δάκρυα της συνέσεως, 157-Δάκρυον ψυχικόν, 143-Διάθεσις πνευματική, 153-Διόρασις, 78-Δίψα, 59-Εγκράτεια, 168-Εδραίωσις, 55-Ελπίς, 123- Εμπειρία, 70-Εντροπή, 145-Έξις ενάρετος, 169- Επαινετή αλλοίωσις, 118-Επιδεξιωσύνη, 63- Επιμέλεια, 131-Επίπονα δάκρυα, 121-Επιστήμη, 116-Επιτηδειότης, 64-Έρεισμα θείον, 58-Έρευνα των θείων Γραφών, 104-Ευθυμία, 82-Ευσχημοσύνη, 81-Ευταξία, 163-Ευτονία ψυχής και σώματος, 122- Ευφυΐα, 102-Ηρεμία, 92-Ησυχία, 174-Θανάτου καταφρόνησις, 90-Θελημάτων εκκοπή, 173- Θεολογία, 125-Θλίψις, 124-Θρήνος, 159- Καθαρότης νοός, 113-Καθαρότης σώματος, 158- Καθαρότης ψυχής, 140-Καλοήθεια, 132-Κατάνυξις, 109-Κατάστασις ηθών, 176-Κατόρθωμα, 130- Κλαυθμός, 149-Μεγαλοπρέπεια, 65-Μελέτη, 180- Μετάνοια, 166-Μίσος ζωής, 101-Μόνωσις, 107- Μωρία δια Χριστόν, 75-Νηστεία, 67-Νήψις, 108- Νοός τήρησις, 94-Ξηροκοιτία, 98-Ξηροφαγία, 151- Οδηγία, 126-Οδύνη, 128-Οδυρμός, 117-Οικονομία, 79-Ολιγοδεΐα, 134-Ολολυγμός, 110-Οσιότης, 152- Παγίωσις, 93-Παίδευσις, 111-Παρθενία, 77-Πείνα, 167-Πόθος θανάτου αγαθός, 73-Πόνος ψυχής, 60- Προαίρεσις αγαθή, 61-Πρόθεσις, 106-Προκοπή, 160-Προόρασις, 97-Προσοχή, 87-Πτωχεία, 105- Πυρπόλυσις, 133-Σιωπή, 74-Σκληραγωγία, 57- Σοφία, 66-Σπουδή, 129-Στεναγμός, 162-Στερρότης, 56-Σύνεσις, 146-Συνέχεια, 68-Σύννοια, 53- Σωφροσύνη, 141-Τα κατά φύσιν έργα, 142-Τα υπέρ φύσιν έργα, 147-Ταπείνωσις, 100-Τήξις σώματος, 177-Υγεία τελεία ψυχής, 179-Υιοθεσία, 86- Υποταγή, 172-Φιλοσοφία εσωτερική, 52-Φρόνησις, 89-Φυγή του κόσμου, 72-Φυλακή ψυχής, 164- Φωτισμός, 154-Χαρά πνευματική, 83-Χρημάτων υπεροψία, 120-Χρήσις ορθή των πραγμάτων, 165- Ψυχής ανάκτησις 4 Testing Auditor Virtuousness The EU ten commandments define ten tests towards the EU auditing license. Tests is another word for exams. Therefore all candidates must pass appropriate examinations in a straightforward procedure that happens millions times every day worldwide. For example to test the financial analysis knowledge of the candidate we use written exam, ISSN: ISBN:

4 oral interview, case study test and similar investigation tools. [1, 4, 8, 9, 12, 13]. However the tenth commandment examinations cannot be treated like the other nine. The differences are: Scientific and technical knowledge of ethics does not guaranty by any means an associate behavior in front of the difficulties of auditing. Students or professionals have the illusion of power with all nine subjects useful knowledge. Therefore a self depreciation is necessary even through the ethics commandment. It represents the most crucial factor for the Auditing license, the cornerstone of any economic and government plan. Ethics itself is more important than all the wealth of this world. To test professional ethics and independence a different approach is necessary. This A more specific virtue test could vary from field test to university lecture. Adoption of our ideas by various auditing licensee parties is not possible. Organizations like: International Accounting Standards Board, Institute of Internal Auditors, International Financial Reporting Standards, CIA, ACCA and all the fancy names of auditing failed to their primary scope: to preserve nations and people wealth. We here, today propose a tiny system to be hired from all these shiny brand names of auditing. 5 EUdit instead of Audit The euphemistic prothema of EU (eu means good in Greek language) is combined with the Audit lemma and we have the perfect combination of Audit. [16] EU=good DIT= audit EUDIT is primarily an auditing education system with auditing subsystems. To test professional ethics and independence our approach is necessary. Our core engine is Dmascenus virtue definition but at a future stage other methodologies could be incorporated. 5.1 University Lecture The auditing license candidate takes a teaching supplementary assignment to a University classroom. The procedure is: A student finds the teaching subject by selecting randomly a number from 1 to 237. The teacher teaches 20 minutes the selected subject The teacher answer to students questions for 20 minutes. Questioning is crucial in order to reveal the true teacher beliefs. Finally students fill in an appropriate form for the lecture given. The candidate antiphasis during its agony to persuade a demanding auditorium are analyzed and the hidden truth is revealed: The candidate knowledge for ethics His actual opinion about ethics issues. His willingness to apply these in his professional life. The potential to affect his personality. 5.2 Curriculum Analysis Auditing license candidate detailed curriculum contains vital information for the virtue and ethics. The concept is to use auditing techniques to investigate personality. Curriculum transactions are fed into EXCEL, Topcaats or IDEA according to each software standards. We seek for discrepancies and we use normal methodology: Identifying exceptional items, Stratification, Checking calculations, Cross-matching data, Testing for gaps and duplicates, Exceptional Sampling. The methodology weakness is that the accuracy is depended from input data. It is necessary a significant amount of personal information. 5.3 Linguistics investigation Another methodology is Linguistic analysis over electronic bibliography of the beneficiary. A subsystem of the virtues is compared with the text attributes and a writer psychography is generated. 5.4 Forensic Investigation A forensic criminal investigation could facilitate thw procedure but we faced a number of theoretic, analysis and programming problems EUDIT system is running today under pre-alpha test and did not gain significant results or attention primarily for reasons like: ISSN: ISBN:

5 6 References References: [1] Z Aggestam C., 19\Feb\99, Towards a global accounting qualification?, European Accounting Review, Volume 8, Number 4, 1999, [2] Andreadou Mariam, Soul Mirror, CAITIS publishing, S paraskevi Rodolibous, Greece, 2006, [3] J. BORRELL FONTELLES, 17\May\06, statutory audits of annual accounts and consolidated accounts, European Parliament, Strasbourg, France, 2008, [4] Cynthia Jeffrey, Research on Professional Responsibility and Ethics in Accounting, Emerald Group Publishing,, 2004, 252 [5] Joannes Damascenus, De virtutibus et vitiis (fragmenta), Scr. Eccl, TLG Work # , Greece, 1224, [6] Osios Peter Damascenus, Filokallia, Niptiki Bible, Damascus, Syria, 775, TLG [7] Georgia Broni, "Eustathios: Dogmatic Eustatheia with Statistics, Algorithmic, Philosophical and Linguistics Methodology to Evaluate Orthodox Sites, Case Study for Direct to C Authoring and the Stoic Art of Signs as a Science of Linguistics", NEW EDUCATIONAL TECHNOLOGIES, Corfu, Greece, October 26-28, 2008 [8] J. Edward Ketz, Accounting Ethics: Critical Perspectives on Business and Management, Routledge,, 2006, [9] T. Libby, L. Thorne, 03\Nov\06, The Development of a Measure of Auditors Virtue, Journal of Business Ethics,, 2006, [10] Keith P. McMillan, Oct\04, Trust and the virtues: a solution to the accounting scandals?, Critical Perspectives on Accounting, Volume 15, Issues 6-7, 2004, [11] Michael Power, The audit society: rituals of verification, Oxford University Press,, 1997, [12] David Satava, Cam Caldwell, 27\Feb\06, Ethics and the Auditing Culture: Rethinking the Foundation of Accounting and Auditing, Journal of Business Ethics, Volume 64, Number 3, 2006, [13] Charalambos Spathis, Michael Doumpos, Autumn 2003, Using client performance measures to identify preengagement factors associated with qualified audit reports in Greece, The International Journal of Accounting, Volume 38, Issue 3, 2003, [14] Steven M. Mintz, 10\Aug\06, Accounting ethics education: Integrating reflective learning and virtue ethics, Journal of Accounting Education, Volume 24, Issues 2-3, 2006, 2006, [15] Theresa Libby, AUDITORS VIRTUE: A QUALITATIVE ANALYSIS AND CATEGORIZATION, Schulich School of Business, York University,, 2000, [16] George Topalidis, Emanoyil Katsanos, December 14\16, EUCLIMA: The Personal Micro-Clima Concept, As Environmental Policy Redefinition For Modern Cities: Sensor Interfacing, Anti- Pollution Technology And Economic Development Aspects., 5th WSEAS International Conference, Canary Islands, Spain, 2007, [17] Velimorovitch Nicholas, 1930, Ecumenical Council an inter-orthodox commission, Vatopedi Monastery on Mount Athos, Greece, 1930, [18] Velimorovitch Nicholas, 2008, Apostles epistula A, EN plo publishing Athens, Greece, 2008, page [19] Warwick Funnell, Feb\07, Accounting and the Virtues of Anarchy, The Australasian Accounting Business & Finance Journal, Vol. 1, No.1, 2007, ISSN: ISBN: