A Lease Auditor’s Ethical Responsibilities
Lease auditors provide their services to both landlords and tenants. Often, when non-employee lease auditors are engaged by a tenant or landlord to verify the other party's compliance with the financial terms of the lease, a common form of auditor compensation is a contingency or "success" fee. This fee is the product of a percentage rate and the savings for the tenant or client. As a result, it’s not uncommon for one party to claim that the auditor reported findings that increased their compensation.
One of iARELA's goals is to dispel such views by insisting on high standards of ethical responsibility by Certified Lease Auditors. It’s critical that Certified Lease Auditors adhere to a high level of ethical and professional conduct at all times.
Ethical Responsibilities:
The ethical responsibilities of Certified Lease Auditors can be summarized by the 3 phases of a lease audit engagement:
In summary, the ethical responsibility of a Certified Lease Auditor to fairly report findings, regardless of the negative impact it may have on their client, is paramount.
The landlord is the owner and controller of the financial records of the property being audited. The requirement for the tenant’s lease auditor to disclose all negative findings may unfairly impact the tenant if the landlord doesn’t cooperate in providing all necessary information needed to verify the accuracy of the tenant’s charges.
If the negative findings are identified before notifying the other party or beginning the audit (e.g., exchange of financial information), the auditor should view their engagement as being an advocate for their client. As such, they should notify their client of any negative findings and their potential costs should the audit proceed beyond the preliminary review stage.
However, should the audit commence with the full cooperation of both sides, the auditor is ethically required to disclose both negative and positive findings upon completion of the report.
Lease Auditing Standards
Standards of Professional Conduct:
Certified Lease Auditors must:
- Always conduct all services in an honest, ethical, and professional manner.
- Never knowingly make any false or misleading statements related to the services provided.
- Never be involved in fraudulent activities
- Must always maintain the highest standards of conduct.
- Continually maintain andimprove their professional competency.
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