754156161-Auditing-Notes-for-South-African-Students-13E-2024-1-1-34-68

What are the two codes of professional conduct relevant to professional accountants and auditors in South Africa?

The SAICA code of professional conduct and the IRBA code of professional conduct.

When did the SAICA and IRBA codes of professional conduct become effective?

15 June 2019.

Why is it necessary to have both the SAICA and IRBA codes?

Because most professional accountants are not registered auditors and may not conduct audits, thus requiring distinct codes for their professional conduct.

What are the five fundamental principles established by the SAICA code for professional accountants?

Integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

What does the term 'public interest' refer to in the context of accounting?

The responsibility of the accounting profession to provide services that maintain public confidence and are based on ethical standards.

What is the 'conceptual framework approach' in professional ethics?

An approach that requires professional accountants to identify threats to compliance with fundamental principles and evaluate those threats.

What should a professional accountant do if faced with non-compliance with laws and regulations?

They must notify management or those charged with governance and strive to rectify the situation to act in the public interest.

What is a self-interest threat?

A threat that occurs when a financial or other personal interest may improperly influence a professional accountant's judgment.

What is a familiarity threat?

A threat that arises when a close relationship leads a professional accountant to become too sympathetic to another party's interests.

What is meant by the term 'professional scepticism'?

An attitude that includes questioning discrepancies and obtaining sufficient evidence when performing audits and assurance services.

What must a trainee accountant do to be bound by the SAICA code?

Enter into a formal training contract registered with SAICA.

Why is the principle of confidentiality critical for professional accountants?

Because they must protect the privacy of client information obtained through professional relationships.

How are the concepts of ethics and professional judgement related in accounting?

Ethics guide decision-making involving moral principles, while professional judgement is applied to navigate ethical dilemmas.

What could happen if a professional accountant breaches the SAICA code?

They could face disciplinary action from SAICA.

What is a self-review threat in the context of accounting?

A threat when a professional accountant evaluates their previous decisions or work, potentially compromising objectivity.

What is the significance of maintaining integrity in professional accounting?

It requires honesty and straightforwardness in all professional relationships, ensuring the reliability of financial reporting.

What is the role of ethical guidance in professional conduct?

To provide standards and principles that help accountants navigate complex decision-making and maintain public trust.

What does the publication of the IESBA code aim to achieve?

To provide a universal set of ethical standards for accountants worldwide.

How should professional accountants handle gifts from clients?

By refusing gifts that may compromise objectivity or create a self-interest threat.

What are the consequences of poor ethical behavior in accounting?

It can lead to loss of public trust, legal consequences, and damage to reputation.

What is the role of continuous professional development for accountants regarding ethics?

To keep accountants updated on ethical standards and practices, enhancing their competency and public trust.

Why is objectivity important in the practice of accounting?

Objectivity ensures that accountants maintain impartiality and make decisions based on factual information rather than personal biases.

What does the term 'ethical dilemma' mean in accounting?

A situation where an accountant faces conflicting ethical principles or obligations, making it difficult to choose the right course of action.

How can professional accountants ensure compliance with ethical standards?

By regularly reviewing codes of conduct, seeking guidance when in doubt, and participating in ethics training.

What is an adverse interest threat?

A threat that happens when a professional accountant has a conflict of interest due to conflicting loyalties.

How does independence relate to the role of an auditor?

Independence is crucial for auditors as it ensures unbiased opinions and the credibility of the audit process.

What actions should accountants take if faced with an ethical violation?

They should report the violation to the appropriate authorities or internal governance and seek to rectify it.

What does the term 'transparency' refer to in accounting?

The practice of openly sharing financial information, fostering trust and accountability in financial reporting.

What is the importance of good governance in the accounting profession?

Good governance promotes ethical behavior, accountability, and the integrity of financial reporting.