The thesis deals with the research of the application and importance of business ethics in auditing. Ethics is a set of principles of moral behavior of a society, and business ethics implies the application of ethical principles in business relations and activities. The paper will analyze the application of business ethics in the audit industry, the implementation of which is defined by ethical values and ethical standards for all auditors. The paper will analyze auditing as an activity, its basic types, as well as basic auditing principles and auditing standards. In order to explain the application of business ethics in auditing, the paper will analyze morality, ethics, ethical principles in auditing, as well as the IFAC Code of Professional Ethics for Accountants. In addition, the paper will explain the most common forms of unethical conduct of auditors and global examples of unethical auditing. The main goal of the theoretical analysis in the paper will be to point out the importance of ethical principles and adherence to them, as well as the importance of professional conduct in the audit profession. In order to meet the objectives of the research, in the thesis a survey was conducted among the inhabitants of the Republic of Croatia. The target group were individuals who confirmed their familiarity with the Code of Professional Ethics for Accountants. Research participants provided answers to questions with the aim of obtaining results on unethical behavior in audit firms.