Zusammenfassung der Ressource
2) Code of Ethics & Conduct
- Fundemental Principles & Conceptual Framework
- Importance of ethics
- The public interest - people rely on accountants and their expertise.
- Accountants often have access to confidential & sensitive information - NEED TO GIVE AN INDEPENDENT
VIEW.
- The Fundamental principles - OPTIC
- INTEGRITY - Straightforward & Honest.
- OBJECTIVITY - Not allow bias or conflict of interest
- PROFESSIONAL COMPETENCE & DUE CARE - Keep up to date CPD!
- CONFIDENTIALITY - Respect confidentiality of information, appropriate authority to disclose.
- PROFESSIONAL BEHAVIOUR - To comply with relevant laws & regulations do not discredit the profession.
- The Conceptual Framework
- Framework rather than a set of rules.
- ADVANTAGES - Actively consider independance rather than just agreeing a checklist of forbidden items.
- Demonstrate that a responsible conclusion has been reached about ethical issues.
- Prevents auditors interpreting rules-based requirements narrowly.
- Allows for the variations that are found in every individual situation
- Can accommodate a rapidly changing environment
- Threats to compliance with the fundamental principles
- Self - Interest
- Self-Review
- Advocacy
- Familiarity
- Intimidation
- SAFEGUARDS
- Firm-Wide Safeguards
- Leadership that stresses the importance of compliance.
- Policies & procedures to enable identification of interests.
- Policies & procedures manage the reliance on revenue received from a single client.
- Policies & procedures to encourage & empower staff to communicate any
issue re compliance.
- Engagement-specific
- Review the work performed by an accountant not involved in the audit
- Consulting an independent third party
- Discussion with those charged with governance
- Rotating senior assurance team personnel
- Independence
- 1) Identify threats
- 2) Evaluate the significance
- 3) Apply Safeguards to eliminate the threat or reduce to an acceptable level
- Where none available, eliminate the interest or decline the engagement.
- CURRENT ISSUES:- EC proposals to ban non audit work for auditors of larger companies, along with
mandatory rotation
- 2012: FTSE 350 co in the UK to put the external audit out to tender at least every 10 years.
- A provider of ASSURANCE services must be, and be seen to be, independent.
- ISA 200 :- Maintaining professional skepticism is necessary to reduce the risks of:-
- Overlooking unusual circumstances
- Over generalising when drawing
concultions from observations
- Using inappropriate assumptions in determining the nature,
timing, extent of the audit and evaluating the threats.
- Public Interest Entities
- Any listed entity
- Defined by regulation or legislation
- Required by legislation to have an audit as
independent as if it was a listed entity
- Allows the CODE to prescribe stricter
requirements for the public interest
entities.
- Confidentiality
- Duty of confidence
- Do not disclose information without PROPER AUTHORITY
- Do not use information for PERSONAL ADVANTAGE
- Information may be disclosed if there is a RIGHT or DUTY to do so.
- Client must agree to disclose in FULL ALL information
relevant to the engagement
- Duty continues even AFTER THE END OF THE
RELATIONSHIP with the client.
- Exceptions to the rule
- Permitted by law and AUTHORISED BY THE CLIENT
- Required by law
- Professional duty or right
- Disclosure may be OBLIGATORY or VOLUNTARY
- OBLIGATORY
- Believe that a client has
committed terrorist offences
- Believe that a client has
committed treason
- VOLUNTARY
- Public Interest
- The police, government department for trade
and industry, recognised stock exchange
- CHECKLIST
- 1) Size of the amounts involved & likely financial damage
- 2) Members of the public are likely to be affected
- 3) Possibility or likelihood of repetition
- 4) Reasons why client is unwilling to disclose to the proper authority
- 5) Gravity of the matter
- 6) Any legal advice obtained
- Protect a professional accountants's interests
- Defend themselves against a criminal charge or
suspicion
- Resist proceedings in relation to a taxation offence
- Resist legal action by a client
- Defend themselves against disciplinary proceedings
- Enable them to sue for their fees.
- Authorised by statute
- Anti-money laundering legislation
- Whistleblowing responsibilities
- Conflicts of interest
- Between members & 'clients'
- Members and firms should not accept or continue engagements in which there are or
are likely to be, significant conflicts of interest between members, firms and clients.
- Unless they are clearly insignificant, they should apply safeguards
- Between interests of different clients
- Clients who are in competition, ensure that it is not the
subject of a dispute between the clients.
- Where acceptance or continuance of an engagement
would, even with safeguards, materially prejudice the
interests of any client, the appointmnet should not be
accepted or continued.
- Between clients interests
- Relationships that ended 2 or more years earlier are unlikely to create a conflict
- Disclosure is the most important safeguard.