The term "professional" carries a responsibility to the public public confidence is affected if a professional (e.g. Doctor, lawyer, accountant, clergy) commit a crime This happens because the general public cannot evaluate the competence of professionals.
The term "professional" carries a responsibility to the public public confidence is affected if a professional (e.g. Doctor, lawyer, accountant, clergy) commit a crime This happens because the general public cannot evaluate the competence of professionals.
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The term "professional" carries a responsibility to the public public confidence is affected if a professional (e.g. Doctor, lawyer, accountant, clergy) commit a crime This happens because the general public cannot evaluate the competence of professionals.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Chapter 2 Objectives • Explain the importance of ethics • Learn how to work through an ethical dilemma • Examine the difference between public accountants and other professionals • Discuss the role of a code of professional conduct for public accountants • Identify the facets of independence • List the reasons for audit committee involvement in the audit process • Focus on key rules of professional conduct • Identify rules of conduct enforcement processes
Independence in Fact • The auditor must be independent when conducting an audit or review level assurance engagement (independence is not required for a compilation) • Can you think of an example where the auditor is NOT factually independent?
Independence in Appearance • This aspect of independence is based upon the unbiased viewpoint of others • It is possible for you to believe that your are independent, whereas an unbiased observer might disagree with you
Threats to Independence • The auditor is required to consider the five facets of independence before accepting or continuing an engagement • The threats are to be documented • If a situation exists that affects a threat, the auditor must document the actions taken, or decline the engagement
Importance of an Audit Committee • Consists of a sub-committee of the board of directors • Should be non-management and competent • Auditor should report to them • Adds significantly to external and internal auditor’s independence
Advertising and Solicitation • All three accounting bodies prohibit solicitation of another accountant’s client and advertising which is not in keeping with the profession’s high standards • Advertising may include complimentary material about the accounting firm but should not claim any superior skills