framework

Question 1

what are the different mechanisms of regulation

Answer 1

-legal /state
-commercial /market
-ethical/peers
-integrity/self/morals

Question 2

what is the need for laws/ regulations and guidelines for audit?

Answer 2

-auditors serve the public interest so they are imp to maintain trust
-it ensures accuracy and reliability
-preventing fraud
-consistency and comparability
-global integration, increase in cross border collabs and investments
-adapting to changes and challenges

Question 3

why is there a need for laws for audit related services

Answer 3

failure of:
-people to live up to reasonable moral standards;
-people to hold each other properly to account; and
-the market adequately to squeeze out bad behaviour.

Question 4

what is the companies act

Answer 4

In most jurisdictions “Companies Act” regulate matters such as:

-management and administration of corporate entities;
-form and content of financial reports;
-the appointment of auditor, etc.

Question 5

what is public interest

Answer 5

the collective well-being of the community of people and institutions the professional accountant serves

Question 6

who is the “public” of the accountancy profession

Answer 6

clients;
governments;
employers and employees;
investors and lenders;
the business and financial community; and
others who rely on professional accountants to maintain the orderly functioning of commerce.

Question 7

what is corporate governance and why is it important

Answer 7

definition: the system by which organisations are directed and controlled.

CG important because it looks at:
-how the organisation’s decision makers act;
-how they can or should be monitored; and
-how they can be held to account for their decisions and actions.

Question 8

“Comply or Explain” vs “Rules-based” Corporate governance

Answer 8

-follow or explain, flexible, transparent
-follow strict rules, rigid, consistent