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Auditing and assurance

Auditing and assurance. Lecture 5a Ethics. Sources of ethical regulation. International (generic) IFAC’s ‘ Code of Ethics for Accountants’ ACCA’s rules are similar to IFAC As example - 2008 Rulebook section 3 Rules of Professional Conduct Contains the ACCA's ‘Code of Ethics and Conduct'

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Auditing and assurance

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  1. Auditing and assurance Lecture 5a Ethics

  2. Sources of ethical regulation • International (generic) • IFAC’s ‘Code of Ethics for Accountants’ • ACCA’s rules are similar to IFAC • As example - 2008 Rulebook section 3 • Rules of Professional Conduct • Contains the ACCA's ‘Code of Ethics and Conduct' • 'Fundamental principles'

  3. Sources of ethical regulation • National (specific) • UK – APB’s ‘Ethical Standards’ • Note for UK students – In the UK the APB has responsibility for ethics – The Companies (Audit, Investigation and Community Enterprises) Act 2004 • HK – ‘Statements of Professional Ethics’ (HKICPA)

  4. The ACCA’s ‘Fundamental Principles’ • INTEGRITY • Honesty • Fair dealing • Truthfulness • OBJECTIVITY • Intellectual honesty • Above client or own interests

  5. ‘Fundamental Principles’ (cont.) • COMPETENCE • Not to undertake work beyond skills • CONFIDENTIALITY • PROFESSIONAL BEHAVIOUR • ‘Due skill, care, diligence and expedition’ • Regard for standards • Courtesy • Consideration to all

  6. APB - Ethical Standards 2008 • ES1 • Integrity, objectivity and independence • ES2 • Financial business, employment and personal relationships • ES3 • Long association with the audit engagement

  7. The APB’s ethical standards (ES) • ES4 • Fees, economic dependence, remuneration and evaluation policies, litigation, gifts and hospitality • ES5 • Non-audit services provided to an audit client • ES-PASE • Provisions available for small entities

  8. 'Code of ethics for professional accountants'IFAC - Revised July 2009 • 'Professional accountants' • Part A 'Fundamental Principles' • Integrity • Objectivity • Professional competence and due care • Confidentiality • Professional behaviour

  9. 'Code of ethics for professional accountants'IFAC - Revised June 2005 • Part B 'Professional accountants in public practice' • Concentrates on independence, objectivity, conflicts of interest… • Part C 'Professional accountants in business' • Evidence of increasingly stricter ethical requirements outside of the 'profession'

  10. Further references • IFAC Code of Ethics http://www.ifac.org/Members/DownLoads/code-of-ethics-for-professi-2.pdf • ACCA Code of Ethics http://www.accaglobal.com/pubs/members/professional_standards/rules_standards/guidelines/Code_ethics_conduct.pdf • APB Ethical standards http://www.frc.org.uk/apb/publications/ethical.cfm

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