ICAP CODE OF ETHICS Auditing Help

1. FUNDAMENTAL ETHICAL PRINCIPLES

1. Integrity·

Integrity implies
(a) A chartered accountant should be honest and straightforward
(b) Fair dealings
(c) A chartered accountant should not sign a report which contains a false or misleading statement

2. Objectivity

A chartered accountant should not compromise his professional judgment because of bias, conflict of interest or undue influence.

3. Professional competence and due care

(a) Maintain professional knowledge and skill
(b)Act with diligence (that is carefully, thoroughly and on timely basis)
(c) Continuous professional development

4. Confidentiality

(a) A chartered accountant should not disclose client’s employer’s confidential information without prior permission of client or where there is a legal or professional duty or right to disclose.
(b) Clients’ confidential information should not be used for personal benefit or for the benefit of third parties.
(c) Confidentiality is also required for a prospective client or employer.
(d) Confidentiality should be maintained even after the end of relationship with the client employer.
(e) There is a need to advise staff of the confidentiality requirements.
(f) Following are the circumstances where chartered accountants are or may be required to disclose confidential information.
(i) Disclosure is permitted by law and is authorized by the client or employer
(ii) Production of documents or other evidence in the course of legal proceedings

(g) In the following circumstances there is a professional right or duty to disclose, when not prohibited by law.
(i) To comply with Quality Control Review

Programme of ICAP

(ii) To respond to an inquiry or investigation by leAP
(iii) To protect professional interests of chartered accountant in legal proceedings

5. Professional behaviour
Professional behaviour implies compliance with laws and regulations to avoid any action that may bring discredit to the profession.

2. THREATS AND SAFEGUARDS

2.1 Threats

Compliance with fundamental principles may be threatened inthe following instances:
(a) Self – interest threat: Threat which may occur as a result of the financial or other interests of a chartered accountant or of an immediate or close family member.
(b) Self – review threat: Threat which may occur when a previous judgment needs to be re – evaluated by the chartered accountant responsible for that judgment.
(c) Advocacy threat: Threat which may occur when a chartered accountant promotes an opinion to the point that subsequent objectivity may be compromised.
(d) Familiarity threat: Threat which may occur when because of a close relationship, a chartered accountant becomes too sympathetic to the interest of others. (e) Intimidation threat: Threat which may occur when a chartered accountant may be deferred from acting
objectively by threats, actual or perceived.

2.2 Safeguards

Safeguards that may eliminate or reduce threats fall into two broad categories
(a) Safeguards created by profession or legislation
(b) Safeguards in the work environment

Safeguards created by profession or legislation include:

− Educational and training requirements for entry into profession
− Continuing professional development requirements
− Corporate governance regulations
− Professional standards
− Monitoring and disciplinary procedures
− External review by a third party

3. ETHICAL CONFLICT RESOLUTION

When initiating a conflict resolution, following matters are to be considered:
(a) Relevant facts
(b) Ethical issues involved
(c) Fundamental principles involved

Posted on November 4, 2015 in ICAP Code of Ethics

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