Ethical Matters In Aduit Appointment

Question 1

Ethical matters in audit appointment

Answer 1

Here are the smart notes:

Ethical Matters in Audit Appointment

Client and Engagement Acceptance

• Threats to compliance with integrity or professional behavior may arise from questionable client issues.
• Relevant factors in evaluating threats include:
  
  • Knowledge and understanding of the client and its activities.
  • Client commitment to addressing questionable issues.

Self-Interest Threats

• A self-interest threat arises if the engagement team lacks necessary competencies.
• Relevant factors in evaluating threats include:
  
  • Understanding of the client’s business and engagement requirements.
  • Knowledge of relevant industries or subject matter.
  • Experience with regulatory or reporting requirements.

Safeguards

• Examples of safeguards to address self-interest threats include:
  
  • Assigning sufficient personnel with necessary competencies.
  • Agreeing on a realistic time frame for engagement performance.
  • Using experts when necessary.

Reliance on Expert Advice

• When relying on expert advice, evaluate whether reliance is warranted.
• Consider factors such as reputation, expertise, resources, and professional standards.

Continuous Ethical Obligations

• Accountants must comply with ethical requirements throughout the engagement period.
• Review acceptance decisions for recurring clients.