5) Ethics - CPC

Question 1

what are the main responsibilities of the PA?

Answer 1

• act in public interest

- comply with the CPC, except where laws conflict

Question 2

what must the PA do if he identifies a breach?

Answer 2

• evaluate its significance
• address the consequences of the breach
• determine whether to report

Question 3

what ethical principles must the PA have?

Answer 3

Confidentiality
Objectivity
Professional behavior
Professional competence and due care
Integrity

Question 4

what is integrity?

Answer 4

• straight forward, honest

- not be associated with false info

Question 5

what is objectivity?

Answer 5

• not to compromise judgement bc of bias, conflict

- not undertake an activity if there are undue influences in judgement

Question 6

what is professional competence and due care?

Answer 6

• act diligently in accordance with standards
• continuous professional development
• ensure professional employees have training and supervision
• do not undertake activities you are not competent to perform / make client aware of limitations

Question 7

what is confidentiality?

Answer 7

• avoid inadvertent disclosure
• not use confidential info for personal advantage
• continue to comply with confidentiality even after end of relationship

Question 8

what is professional behaviour?

Answer 8

• comply with laws
• not do anything to discredit the profession
• when marketing, do not bring profession into dispute

Question 9

what is the signing convention for reports and certificates?

Answer 9

PA shall not delegate to a non-partner/director the power to sign the audit/review/other reports that are required by law to be signed by the PA, unless written consent from IRBA

Question 10

what are the categories of threat?

Answer 10

• self-interest
• self-review
• familiarity
• intimidation
• advocacy

Question 11

how can the PA address threats?

Answer 11

if accountant determines that threat is not at an acceptable level, must reduce to acceptable level, by:

• eliminating circumstances creating the threat
• safeguards; end relationship if safeguards cannot reduce to an acceptable level

Question 12

what quality must the PA have in their assurance engagements?

Answer 12

independence

Question 13

what fundamental principles link to independence?

Answer 13

objectivity and integrity

Question 14

what does independence consist of?

Answer 14

independence of mind

independence in appearance

Question 15

what is independence of mind?

Answer 15

state of mind that permits expression of conclusion without being affected by influences that compromise professional judgement

Question 16

what is independence in appearance?

Answer 16

avoiding facts and circumstances which would make a reasonable third party conclude that the PA / their team’s integrity or objectivity or professional skepticism have been compromised

Question 17

what is the reasonable third party test?

Answer 17

(when evaluating threats)
- would a reasonable third party come to the same conclusion if they had the same information and skills and competence as you

Question 18

what is a PAIB?

Answer 18

a CA(SA) who is an employee, NED, partner in:

• commerce, industry
• public sector
• education

Question 19

what is a PAIPP?

Answer 19

a CA(SA) who works in a firm that provides professional services such as:

• assurance
• accounting
• taxation

Question 20

what responsibilities does the firm have?

Answer 20

ethical responsibilities and can be held for breach

Question 21

which parts apply to PAIB?

Answer 21

1 and 2

Question 22

which parts apply to PAIPP?

Answer 22

1, 2, 3 and 4

Question 23

what is part 2 for?

Answer 23

for any ethical issues that may arise for the PA regarding their employer / when performing activities pursuant to relationship with firm

Question 24

what is part 3 for?

Answer 24

PAIPP in their work with clients

Question 25

what is part 4 for?

Answer 25

for an assurance client when independence is under threat

Question 26

what is a contingent fee?

Answer 26

a fee whose amount depends on an outcome

Question 27

what is the conceptual framework approach?

Answer 27

1) identify any threats to compliance
2) evaluate threats
3) address threats