Code of Ethics

Question 1

Straightforward and honest in all professional and business relationships.

Answer 1

Integrity

Question 2

Should not allow bias, conflict of interest or undue influence of others to override
professional business judgments.

Answer 2

Objectivity

Question 3

Continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques.

Answer 3

Professional Competence and Due Care

Question 4

Respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties

Answer 4

Confidentiality

Unless there is a legal or professional right or duty to disclose

Question 5

Compliance with relevant laws and regulations and should avoild any action that discredits the profession.

Answer 5

Professional Behavior

Question 6

Conceptual Framework Approach

Answer 6

1. Identification of the threat to fundamental ethical principles.
2. Evaluation and address of threats
3. Response and application of safeguards to eliminate the threats or reduce them to an acceptable level

Question 7

Result of the financial or other threats of a professional accountant or of an immediate or close family member.

Answer 7

Self-interest threats

Question 8

Direct financial interest in a client might include ownership of client equities or financial instruments, financial interest in a joint venture with a client or employee(s) of a client, and financial interest in a non-client as an investor or investee.

Answer 8

Self-interest threats

Question 9

Indirect material financial interest results from being an administrator of any trust or estate with a financial interest in the client company.

Answer 9

Self-interest threats

Question 10

Ability to influence client

Answer 10

Self-interest threats

Question 11

A loan or guarantee to or from an assurance client

Answer 11

Self-interest threat

Question 12

Undue total dependence on total fees from an assurance client

Answer 12

Self-interest threat

Question 13

Concern about possibility of losing the engagement

Answer 13

Self-interest threat

Question 14

Having a close business relationship with an assurance client

Answer 14

Self-interest threat

Question 15

Potential employment with an assurance client

Answer 15

Self-interest threat

Question 16

Contingent fees relating to assurance engagements

Answer 16

Self-interest threat

Question 17

Are fees fixed by a court or other public authority considered as contingent fees?

Answer 17

NO.

Question 18

May occur when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment

Answer 18

Self-review threat

Question 19

May occur when a member of the assurance team previously was an employee of the client (especially a director or officer) in a position to exert significant influence over the subject matter of the assurance engagement

Answer 19

Self-review threat

Question 20

May occur when a professional accountant promotes a position or opinion to the point that subsequent objectivity may be compromised.

Answer 20

Advocacy threat

Question 21

Selling, underwriting or otherwise dealing in financial securities or shares of an assurance client.

Answer 21

Advocacy threat

Question 22

Acting as the client’s advocate in a legal proceeding.

Answer 22

Advocacy threat

Question 23

May occur when, because of a close relationship, a professional accountant becomes too sympathetic to the interests of others.

Answer 23

Familiarity threat

Question 24

A member of the assurance team having an immediate family member or close family member
who is a director, officer of the assurance client.

Answer 24

Familiarity threat

Question 25

A member of the assurance team having a close family member who is an employee of the assurance client and in position to significantly influence the subject matter of the assurance engagement.

Answer 25

Familiarity threat

Question 26

A former partner of the firm being a director, officer of the assurance client or an employee in a position of a significant influence.

Answer 26

Familiarity threat

Question 27

Long association of a senior partner of the assurance team with the assurance client

Answer 27

Familiarity threat

Question 28

Acceptance of gifts or hospitality from the assurance client, its directors, officers or employees.

Answer 28

Familiarity threat *unless the value is clearly insignificant*

Question 29

May occur when a professional accountant may be deterred from acting objectively by threats, actual or perceived.

Answer 29

Intimidation threat

Question 30

Educational training and experience requirements to become a certified member of the profession

Answer 30

Safeguard created by the profession, legislation or regulation

Question 31

Continuing education requirements

Answer 31

Safeguard created by profession, legislation or regulation

Question 32

Professional accounting, auditing and ethics standards and monitoring and disciplinary processes

Answer 32

Safeguard created by the profession, legislation or regulation

Question 33

Peer review and quality control

Answer 33

Safeguard created by the profession, legislation or regulation

Question 34

Professional rules and legislation governing independence requirements of the firm

Answer 34

Safeguard created by the profession, legislation or regulation

Question 35

Leadership of the firm that stresses the importance of compliance with the fundamental principles.

Answer 35

Safeguard created in the work environment

Question 36

Leadership of the firm that establishes the expectation those members of an assurance team will act in the public interest.

Answer 36

Safeguard in the work environment

Question 37

Policies and procedures to implement and monitor quality control of engagements.

Answer 37

Safeguard in the work environment

Question 38

Documented policies regarding the identification of threats to compliance with the fundamental principles, the evaluation of the significance of these threats and the identification and the application of safeguards to eliminate or reduce the threats, other than those that are clearly insignificant, to an acceptable level.

Answer 38

Safeguard created in the work environment

Question 39

For firms that perform assurance engagements, documented independence policies regarding the identification of threats to independence, the evaluation of the significance of these threats and the evaluation and application of safeguards to eliminate or reduce the threats, other than those that are clearly insignificant, to an acceptable level.

Answer 39

Safeguard in the work environment

Question 40

Documented internal policies and procedures requiring compliance with the fundamental principles.

Answer 40

Safeguard created in the work environment

Question 41

Policies and procedures that will enable the identification of interests or relationships between the firm or members of engagement teams and clients.

Answer 41

Safeguard in the work environment

Question 42

Policies and procedures to monitor and, if necessary, manage the reliance on revenue received from a single client.

Answer 42

Safeguard in the work environment

Question 43

Using different partners and engagement teams with separate reporting lines for the provision of non-assurance services to an assurance client.

Answer 43

Safeguard in the work environment

Question 44

Policies and procedures to prohibit individuals who are not members of an engagement team from inappropriately influencing the outcome of the engagement.

Answer 44

Safeguard in the work environment

Question 45

Timely communication of a firm’s policies and procedures, including any changes to them, to all partners and professional staff, and appropriate training and education on such policies and procedures.

Answer 45

Safeguard created in the work environment

Question 46

Designating a member of senior management to be responsible for overseeing the adequate functioning of the firm’s quality control system.

Answer 46

Safeguard created in the work environment

Question 47

Advising partners and professional staff of those assurance clients and related entities from which they must be independent.

Answer 47

Safeguard created in the work environment

Question 48

Advising partners and professional staff of those assurance clients and related entities from which they must be independent.

Answer 48

Safeguard created in the work environment

Question 49

A disciplinary mechanism to promote compliance with policies and procedures.

Answer 49

Safeguard created in the work environment

Question 50

Published policies and procedures to encourage and empower staff to communicate to senior levels within the firm any issue relating to compliance with the fundamental principles that concerns them

Answer 50

Safeguard created in the work environment

Question 51

Involving an additional professional accountant to review the work done or otherwise advise as necessary.

Answer 51

Firm-wide safeguards

Question 52

Consulting an independent third party, such as a committee of independent directors, a professional regulatory body or another professional accountant.

Answer 52

Firm-wide safeguard

Question 53

Discussing ethical issues with those charged with governance of the client.

Answer 53

Firm-wide safeguard

Question 54

Disclosing to those charged with governance of the client the nature of service provided and extent of fees charged.

Answer 54

Firm-wide safeguard

Question 55

Involving another firm to perform or re-perform part of the engagement.

Answer 55

Firm-wide safeguard

Question 56

Rotating senior assurance team personnel.

Answer 56

Firm-wide safeguard