Lecture_12_S22009 - The University of Sydney ACCT3014...

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The University of Sydney ACCT3014 - Auditing and Assurance Semester 2.2009 Week 12 Lecture o Ethics / Auditor Independence o Legal Liability o Using the work of Others Purpose of Code of Ethics Ethics Vs Morals What is the difference? Ethics requires knowledge of moral principles, and skills in applying them to problems and decisions. Code of Ethics - formal, systematic statement of rules and principles developed by community to promote its well-being and punish undermining behaviour. APESB Standards and Force of Law Revised Auditing Standards (ASAs) issued by AUASB are legislative instruments under the Corporations Act 2001, effective on or after 1 July 2006 (i.e. for Corporations Act audits and reviews ASAs have the force of law). Where ASAs (e.9. ASA 200, ASA 220) make reference to APESB standards, e.g. APES 110, then the requirements of APES '1 10 also have legal enforceability re Corporations Act audits and reviews.
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"Gode of Ethics for Professional Accountants" {APES 1 10} r Mandatory for all members and failure to observe code can result in disciplinary procedures. r Members are expected to comply with the spirit as well as the letter of the code. o Code is in three parts: - Part A: fundamental principles and conceptual framework - Parts B and C: illustrate application of conceptual framework to specific situations: . Part B: Members in Public Practice . Part C: lvlembers in Business APES 110: Part A Section 100 - Fundamental Principles r Distinguishing mark of accountancy profession - oublic interest o Fundamental principles: - integrity - objectivity - professional competence and due care - confidentiality - professional behaviour APES 10: Part A Section 100 - Conceptual Framework r Evaluate any threats (and their significance) to compliance with fundamental principles o Existence / implementation of appropriate safeguards
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APES 110: Code of Ethics for o Categories of threats: - Self-interest threats - Self-review threats - Advocacy threats - Familiarity threats - lntimidation threats r Parts B and C of the Gode, respectively, provide examples of circumstances that may create these categories of threats o Refer sections 200,210,220 and 240 Independence - Ethical Requirements Section 290 of APES 110 . Emphasises both: - Independence of Mind The state of mind that permits the expression of a conclusion without being atfected by influences that compromise professionaljudgment, allowing an individual to act with integrity, and exercise objectivity and professional scepticism. - Independenc€ in Appearance The avoidance of facts and circumstances that are so signiflcant that a reasonable and informed third party, having knowledge of all relevant information, including safeguards applied, would reasonably conclude a Firm's, or a member of the Assurance Team's, integrity, objectivity or professional scepticism had been compromised. Independence Requirements
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This note was uploaded on 11/18/2010 for the course ACCT 3014 taught by Professor - during the Three '09 term at University of Sydney.

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Lecture_12_S22009 - The University of Sydney ACCT3014...

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