Block 2 - Ethical And Professional Issues

Question 1

Ethical matters

Question 2

Professional matters

Question 3

Exposure draft amendments

Answer 3

Revisions to promote role and mindset of professional accountant

Question 4

Code of Conduct

Answer 4

Published by IESBA

Question 5

Code of ethics

Question 6

Ethical sides of accountant

Question 7

Integrity

Answer 7

Honesty, straightforward

Question 8

Objectivity

Answer 8

Independence threats

Question 9

Confidentiality

Question 10

Professional sides of an accountant

Question 11

Professional behavior

Answer 11

Adherence to applicable law for audit and non-audit services (e.g. IASs).

Question 12

Professional competence and due care

Answer 12

Industry or service specialization thus competence; service conducted with care (skeptical mindset, careful planning, sufficient, appropriate evidence, review of work performed)

Question 13

Ensure info and explanations kept confidential

Question 14

Exceptions

Question 15

Obligatory disclosure

Answer 15

By law, to regulatory authority e.g. NOCLAR

Question 16

Break confidentiality

Question 17

Voluntary disclosure

Answer 17

Public interest - optional, exercise discretion

Question 18

Judgement

Question 19

Information access

Question 20

Cannot disclose information for personal gain

Question 21

Inform public at large

Question 22

Legal guidance by consultant

Question 23

Money laundering

Answer 23

MLRO, then MLRO decides future course of action - obligatory disclosure fulfilled by auditor

Question 24

Middle managent discussion

Question 25

TCWG management discussion

Question 26

Inform regulator (obligatory disclosure)

Question 27

Voluntary disclosure

Question 28

Conflicts of interest

Question 29

Client competitors

Question 30

Nothing improper

Question 31

Safeguards

Question 32

Consent of management

Question 33

Notify client

Question 34

Different team

Question 35

Permission

Question 36

Different partners, different independent second partner reviewers

Question 37

Confidentiality agreement

Question 38

Both teams

Question 39

No information sharing

Question 40

Legal trouble

Question 41

Client with higher audit fee

Question 42

Commercial interest

Question 43

Threats to objectivity

Question 44

Self-interest

Question 45

Self-review

Question 46

Intimidation

Answer 46

E.g. client says auditor will get low fees

Question 47

Familiarity

Question 48

Advocacy

Question 49

Management threat

Question 50

Justification

Question 51

Management responsibilities assumed

Answer 51

Prepare financial statements, develop and implement sound internal controls, recruit Human Resources, strategic decisions

Question 52

Segregation

Question 53

No safeguards

Question 54

Ethical threats

Question 55

Listed companies

Question 56

Non-listed companies

Question 57

Big companies management threat is the same

Question 58

Small companies owner managed

Answer 58

Can assume management responsibilities because management can lack competence and skill

Question 59

Safeguards

Question 60

Change/rotate person

Question 61

Discuss with TCWG

Answer 61

Intimidation

Question 62

Different teams

Answer 62

Self-review

Question 63

Advocacy

Answer 63

Politely decline as listed company, permissible as long as safeguards for no -listed company

Question 64

Prohibited contingent fees, dispose of shares, recover outstanding fees first

Answer 64

Self-interest