University of Miami International and Comparative Law Review


We test the assumption as to whether financial and nonfinancial reporting by multinational corporations (MNCs) voluntarily adhering to human rights standards are subject to ethical guidelines. In particular, the paper finds that neither the operators of human rights impact assessments (HRIAs) nor audited companies, at least in any manner that is publicly detectable, impose any ethical conduct on human rights auditors. Neither individual auditors nor human rights audit firms have set up independent regulatory bodies that would regulate auditors and audit firms. This has a detrimental effect on HRIAs and the process itself. The same assumption is tested against financial corporate reporting, specifically tax. It is found that corporations voluntarily subjecting themselves to HRIAs do not infuse human rights-based reporting standards into their tax audits and neither do tax professionals. No ethical duty is prescribed by tax auditor professional bodies or companies themselves. For the latter, this is incongruous given that ethical tax reporting is no less a human rights issue than any other human rights impact arising from the operations of a corporation in the host state. The absence of ethical audit standards in financial and non-financial human rights-related reporting distorts both processes and produces poor outcomes.