Ethics and acceptance

Question 1

Name all fundamental principles

Answer 1

Professional competence and due care
Professional behaviour
Confidentiality
Integrity
Objectivity

Question 2

Name all threats

Answer 2

Self interest
Self review
Intimidation
Advocacy
Familiarity

Question 3

Give 3 examples of safeguards

Answer 3

Options:
Segregation of duties
Review
Rotation
Ceasing to act
Separate teams
Engagement quality review

Question 4

Define integrity

Answer 4

Being honest and straightforward

Question 5

Define objectivity

Answer 5

No bias

Question 6

Define professional competence and due care

Answer 6

Maintain knowledge and skills required

Question 7

Define confidentiality

Answer 7

Must not disclose information

Question 8

Define professional behaviour

Answer 8

Comply with relevant laws and regulations. Do not put the business in disrepute

Question 9

Give 5 things an engagement letter should include

Answer 9

Responsibilities
Objective and scope of the audit
Reference to inherent limitations of the audit
What communications will take place
Specific planning issues
Basis for fees
Reference to legislation

Question 10

Preconditions of an audit

Answer 10

Acceptable reporting framework
Management understands the responsibilities