Академический Документы
Профессиональный Документы
Культура Документы
1. External Audit
2. Internal Audit Management is responsible for preparing and presenting the financial
statements. Auditor’s responsibility is to form and express an opinion
TYPES OF AUDITOR on these financial statements based on his audit.
Audit provides only reasonable assurance not absolute assurance.
1. External Auditors – perform financial statement audits.
2. Internal Auditors – perform operational audit.
3. Government Auditors – conduct compliance audit.
FACTORS OF LIMITATIONS 6. What was held true in the past will continue to hold true in the
future in the absence of known conditions to the contrary –
1. Sampling risk
experience and knowledge from past audits can be used to
2. Error in application of judgement
determine procedures to be performed.
3. Reliance on management’s representation
7. Audit benefits the public.
4. Inherent limitations of client’s internal control systems
5. Nature of evidence
Nature of evidence is generally persuasive rather than conclusive in
nature.
PART A – General Application Safeguards – actions or other measures that may eliminate therats or
reduce them to an acceptable level.
FUNDAMENTAL PRINCIPLES:
1. Safeguards created by profession, legislation, or regulation – such
a. Integrity – not merely honesty but fair dealing and truthfulness. as educational, training and experience requirements, CPD,
b. Objectivity – obliged to be fair, intellectually honest and free of governance regulations, etc.
conflicts of interest.
2. Safeguards in work environment – policies and procedures.
c. Professional Competence and Due Care – accept only when a. Engagement Specific Safeguards – involving additional CPA
accountant can reasonably expect to discharge professional to review work done, etc.
competence. Due care is the responsibility to perform in accordance
b. Safeguards within client’s systems and procedures –
with standards. client’s implemented internal procedures.
a. Attainment of professional competence through formal
education etc. PART B – Professional Accountants in Public Practice
b. Maintenance of professional competence by being aware
PROFESSIONAL APPOINTMENT
of all developments affecting profession.
d. Confidentiality Client Acceptance - consider whether acceptance would create any
a. Except when – permitted by client, required by law, threats to compliance with the fundamental principles.
professional duty or right to disclose confidential o Safeguards may include obtaining knowledge of client, etc.
information. Engagement Acceptance – should agree to provide only those services
e. Professional Behavior – refrain from any conduct that brings he is competent to perform.
discredit to profession. o Acquire understanding of the nature of the business, possessing
experience with relevant regulatory or reporting requirements,
etc.
Changes in Professional Appointment – should determine whether Contingent Fees
there are any reasons, professional or other, for not accepting the Referral Fee of Commission - maybe paid to an existing accountant
engagement. who can’t perform needed service for referring an existing client to
o Discussing client’s affair fully and freely with existing accountant another professional accountant or maybe paid by an accountant to
and asking him to provide known information that the proposed obtain a client whose needs of services cannot be satisfied by the
accountant should be aware of. existing accountant.
o Should not pay or receive referral fee unless he has established
CONFLICT OF INTEREST
safeguards.
Examples are:
MARKETING PROFESSIONAL SERVICES
When accountant competes directly with a client or has a joint venture
Marketing Professional Services can impose threats if services are
with a major competitor of a client.
marketed in a way that is inconsistent with that principle.
When accountant that performs services for clients whose interests are
Accountant should not bring profession into disrepute.
in conflict.
Generally, any form of advertisement is allowed.
o Notify client and all known relevant parties that there interests
are in conflict and obtaining their consent to act, use of separate
engagement teams, etc.
SECOND OPINIONS
Examples are:
The second opinion of the accountant may not be based on the same
set of facts that were made available to the existing accountant.
o Seek client permission to contract existing accountant, if not
granted permission, accountant should consider if it is
appropriate to provide second opinion.
If fee is quoted lower than another is not in itself unethical. But may
impose a threat that it may be difficult to perform engagement in
accordance with standards for that price.