Notes of a second year student studying Bachelors of Accounting at the University of the Free State. With this notes that i have compiled, i was able to proudly say that i received a distinction in Auditing by using this notes. If you are struggling with Auditing use this notes, and you could also ...
→ IRBA Code ~ Registered Auditors (RA’s)
→ SAICA Code ~ Members of SAICA (CA’s & AGA’s)
→ Originated from (IESBA)
→ Code revised 2018 – Effective date: 15 June 2019
Reason behind the code:
• Provides Ethical guidance to Auditors (RA’s), Chartered Accountants (CA’s) and Associate General
Accountant (AGA’s).
Importance of code:
1. A distinguishing mark of the accounting profession:
a. Acceptance of the responsibility to act in the public interest.
b. Theme of the Code
2. Daily occupations which will give rise to specific ethical situations of a professional nature.
a. Have I acted in a truly independent manner?
b. Should I make use of confidential information obtained from a client, for my own advantage?
c. Should I report a client who may been evading tax to the authorities?
3. The Code gives you more than the law:
a. Law: What you must not do
b. Code: What should you do (Principles)
4. Not the only source of ethics:
a. Companies Act of 2008
b. What to do you do when the Act (Law) requires more strict requirements?
5. CPC addresses:
a. Different relationships with clients (auditor, tax consultant or working of the client as the CFO)
b. Ethics surrounding those relationships
c. How to identify an ethical dilemma How to respond appropriately
, PART A ~ General Application of the Code
→ Professional Accountants have a responsibility to act in the public interest.
→ Responsibility is not exclusively to satisfy the needs of an individual client or his employer.
→ A professional accountant shall comply with the requirements of the SAICA Code of Professional
Conduct.
Integrity Requires accountants to be straightforward, honest, fair & trustworty in all
professional and business relationships.
Should not be associated with information they believe
~ Contains a materially false or misleading statement OR
~ Contains statements or information provided recklessly OR
~ Exclude or obscures information than is misleading
CAs must distance themselfes from such information.
Objectivity Should not allow bias, conflict of interest or undue influence of others to overide
or compromise professional or business judgements.
Independence Accountants in public practice are required by International Independence
(Linked to Standards to be independent when performing audits, reviews and other
objectivity) assurance services.
Only for Audit &
Review
Independence of mind:
When a professional
accountant acts or makes a Independence in apperance:
professional judgement, there
are no factors that would From the view of a reasonable and
influence his judgement/ informed 3rd party, the
actions professional accountant's
judgement/ actions have been
compromised.
,Professional Maintain professional knowledge & skill at a level that ensures competent
professional services.
Competence
& Due Care Act diligently (careful) in accordance with the applicable technical and
professional standards.
Must remain up to date with technology, professional and business relationships
(lifelong learning).
Ensure that all subordinates have the appropriate trainning & supervision.
Must not engage in transaction with a lack of knowledge OR skill unless CA obtains
advice or assistance from competent person.
Confidentiality Confidential informations can not be disclosed without appropriate authority OR
a legal or professional duty to do so.
Must maintain Confidentiality:
~ In social environment
~ Of client or employer
~ After a client or employers relationship has ended.
Must not use confidential information:
~ For personal advantage
~ Or advantage of a third party
Professional Must comply with relevant laws & regulations + avoid any conduct that may
Behaviour discredit the profession.
Marketing or promoting activities:
* Be honest and trustful
* Shall not make exaggerated claims for service offered
* Shall not make disparaging references or unsubstansiated comparisons to the
work of others
Membership of multiple firms:
Is permitted to be a member of more than one firm of registered auditors and/ or
a member of any other firm which offers professional accounting services.
Signing reports or certificates:
~ Must not delegate to any person who is not a partner or fellow director, the
power to sign audit, review or other assurance reports or certificates.
~ this restiction may be waved in emergencies
, Always links with a fundamental activity
❖ A financial or other interest in the matter will
inappropriately influence a professional accountant’s
1) Self- interest threat judgement or behaviour.
Example: A professional accountant owns shares in the client.
❖ The professional accountant will not appropriately
evaluate the work that the professional accountant or
another professional accountant within the same firm has
2) Self – Review threat prepared.
Example: The audit firm has prepared the AFS for A Ltd on
which it will issue an audit opinion.
❖ The professional accountant will promote a client or
employing firm’s position to the point that the
3) Advocacy threat professional accountant’s objectivity is compromised.
Example: The audit partner assists the client to list on the JSE.
❖ Due to a long or close relationship with a client or
employing organisation, a professional accountant will be
too sympathetic to their interest or too accepting of their
4) Familiarity threat work.
Example: The professional accountant accepts gifts and
preferential treatment.
❖ The professional accountant will be deterred from acting
objectively because of actual or preserved pressure.
5) Intimidation threat
Example: A professional accountant in business fails to report
fraud by his manager out of fear of being dismissed.
Framework helps professional accountants to:
1. ID a threat to the fundamental principles;
2. Evaluate the threat;
3. Address the threat by eliminating or reducing them to an acceptable level
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