MIA BY-LAWS
PART A: FUNDAMENTAL PRINCIPLES AND CONCEPTUAL FRAMEWORK
FUNDAMENTAL PRINCIPLES
INTEGRITY • Straightforward & honest in all pro & business rship
• Also implies fair dealing & truthfulness
• PA shall not knowingly be assoc with reports, returns, comms or
other inform where PA believes:
o Contains a materially false or misleading statement
o Contains statements/info furnished recklessly
o Omits/obscures info req to be included = misleading
• When aware, PA shall take steps to be disassoc from that info
OBJECTIVITY • Not allow bias, conflict of interest or undue influence of others to
override pro/business judgments
• PA may be exposed to situations that may impair objectivity
• Impracticable to define and prescribe all such situations
• PA shall not perform a pro service if circum/rship biases or
unduly influences his judgment with respect to that service
PROFESIONAL • Maintain prof knowledge & skill at the level req to ensure
COMPETENCE client/employer receives competent pro services based on
AND DUE CARE current dev in practice, legis & techniques
• Act diligently & in accd with applicable technical & pro standards
• Pro competence: exercise of sound judgment in applying pro
knowledge & skill in performance of service
• Phases of pro competence:
o Attainment
o Maintenance: req continuing awareness & understanding of
relevant technical, pro & business dev
• Diligence: resp to act in accd with reqs of an asgmt, carefully,
thoroughly & on timely basis
• Ensure those working under PA’s authority in a pro capacity have
approp training & supervision
• Make clients, employers or other users of professional services
aware of the limitations inherent in services
CONFIDENTIALITY • Respect confid of info acq from pro & business rships
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• Not disclose info to 3 parties without proper & specific authority,
unless there is a legal/pro right or duty to disclose
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• Not use the info for the personal advantage or 3 parties
• Maintain confidentiality:
o In soc enviro – alert to possibility of inadvertent disclosure (to
close/immediate family member)
o Info disclosed by a prospective client
o Info within firm/employing org
• Ensure staff under PA’s control & persons from whom advice &
assistance is obtained respect PA’s duty of confidentiality
• Continues even after end of rship between PA & client:
o When PA acquires new client, entitled to use prior experience
but NOT use/disclose confidential info acq/receive as a result
of pro/business rship.
• Circums where PA req to disclose confid info or such disclosure
may be appropriate:
o Disclosure permitted by law, auth by client
o Disclosure req by law:
 Doc as evidence in legal proceedings
 Disclosure to approp public authority
o Pro duty/right to disclose:
 Comply quality review of MIA
 Respond to inquiry/investigation by reg body
 Protect pro interest of PA in legal proceedings
 Comply with tech standards & ethics req
• Factors to consider whether to disclose confid info:
o Whether interests of all parties could be harmed if the client
give consent to disclosure of info
o Whether all relevant info is known & substantiated; if not, pro
judgment is used in determining type of disclosure to make
o Type of comm expected & to whom it is addressed
o Whether parties receiving comm are approp recipients
PROFESIONAL • Comply with relevant laws & regulations
BEHAVIOR • Avoid any action that discredits the profession
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o Actions that a reasonable & informed 3 party would be likely
to conclude adversely affects the good reputation of the
profession (after weighing all specific facts & circums
available to PA at that time)
Advertising, Marketing and Promotions
• PA shall not bring profession into disrepute – ensure that advrt,
marketing or promo material is:
o Pro dignified & in good taste
o Carried out in accd with relevant legis where applicable
• PA shall be honest & truthful – shall not make:
o Exaggerated claims for services they able to offer, the qualf
they possess, or experience they gain
o Disparaging ref/unsubst comparisons to work of others
CONCEPTUAL FRAMEWORK APPROACH
• Why use CFA?
o Impossible to define every situation that creates threats to compliance with fundm principles &
specify appropriate action
o Nature of engagements & work assignments may differ: diff threats, diff safeguards
STEP 1 Is there a threat to compliance with fundm principles?
STEP 2 Is the threat significant (not at acceptable level)?
• Eval threat when acct know/reasonably expected to know will
compromise fundm principles
• Take qual & quant factors to eval
STEP 3 Is there any safeguard can be applied?
• To eliminate threat/to reduce it to acceptably low level
• Must exercise pro judgment
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• Take into acc whether 3 party will consider the safeguard will
reduce/eliminate threat
STEP 4 If threat is too significant/no safeguard?
• Decline/discontinue pro service
• Resign from client/employing org
 Threats:
THREATS • May be created by broad range of rships & circums
• Could compromise/preceived to compromise compliance with fundm principles
• A circum/rship may create >1 threat, a threat may compromise >1 fundm principle
THREAT EXAMPLES

SELF-INTEREST Member of assurance team: SAFEGUARDS

Financial/other interest • Have direct financial interest (FI) in client MAT
will inapp influence pro • Have significant close business rship with client CATEGORY EXAMPLES
acct judgment/behavior • MAT enter into employment nego with client
• Discovering significant error when eval results of previous pro FIRM-WIDE • Firm’s leadership:
service performed by firm member o Stress importance to comply fundm principles
Firm: o Expect that members of assur team will act in public interest
• Have undue dependence on total fees from client • Policies and procedures:
• Concerned about possibility of losing significant client o Implement & monitor quality control of engagements
• Contingent fee arrangement on assurance engmt with client o Need to identify threats to compliance with fundm principles,
evaluate significance, apply safeguards to eliminate/reduce
SELF-REVIEW Member of assurance team: threats, when no safeguards – terminate/decline engmt
Will not approp eval • Being/recently been, a director/officer of the client o Requiring compliance with fundm principles (documented)
results of previous • Being/recently been employed by client in position to exert signf o Enable identification of interests/rships between firm or members
judgmt made or service influence over subject matter of engmt of engmt teams & clients
performed by firm Firm: o Monitor & manage reliance on revenue received from 1 client
member, which will be • Issue assur report on effectiveness of fin systems op after o Prohibit non-members of engmt team from inapprop influencing
relied when forming design/implement the systems engmt outcome
judgmt in providing • Prepare ori data used to generate records which subject matter o Encourage & empower staff to comm to senior levels within firm
current service of assur engmt any issue relating to compliance with fundm principles that
• Perform service for assur client that directly affects subject matter concerns them
info of assurance engmt • Use diff partners & engmt teams with separate reporting lines for
provision of non-assur services to assur client
ADVOCACY • Firm promoting shares in an audit client • Designate member of senior mgmt to be responsible for overseeing
Will promote client’s • Acting as an advocate on behalf of an audit client in litigation or adequate functioning of firm’s QC system
position: objectivity is disputes with third parties • Advise partners & pro staff of assur clients: indp is req
compromised • Disciplinary mech to promote compliance with policies

FAMILIARITY • Member of engmt team having close/immediate family member ENGAGEMENT- • Having PA who was:
Due to a long/close who is a SPECIFIC o Not involved with the non-assur service review the non-assur
relationship with o Director/officer of client, or work performed or otherwise advise as necessary
client/employer: too o Employee of client in position to exert signf influence over o Not a member of assur team review the assur work performed or
sympathetic to their subject matter of engmt otherwise advise as necessary.
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interests or too • Director/officer of client in position to exert signf influence over • Consult indp 3 party e.g. committee of indp directors, a pro reg body
accepting of their work subject matter of engmt, recently engmt partner or another PA
• Accept gifts/preferential treatment from client, unless value is • Discuss with those charged with govn of client on:
trivial/inconsequential o Ethical issues
• Senior personnel have long association with assur client o Nature of services provided & extent of fees charged
INTIMIDATION Firm: • Involve another firm to perform/re-perform part of engmt
Deterred from acting • Threatened with dismissal from a client engagement • Rotate senior assur team personnel
objectively because of • Threatened with litigation by the client CLIENT’S SYSTEM • Client req persons other than mgmt to ratify/approve aptmt of a firm
actual/perceived • Pressured to  inapprop extent of work performed in order to  & PROCEDURES to perform engmt
pressures: attempts to fees • Client has competent employees with experience & seniority to make
exercise undue influence • Threatened: no non-assurance contract given if disagree with managerial decisions
over pro acct client’s inapprop actg treatment • Client implement internal procedures that ensure obj choices in
Pro acct: commissioning non-assur engmt
• Pressured to agree with client employee’s judgment because  • Client has corp govn structure: provide approp oversight & comm
expertise on matter in question regarding firm’s services
• Informed by firm partner that planned promotion won’t occur
unless agree with client’s inapprop acctg treatment
PROFESSIONAL APPOINTMENT • FS audit engmt: cannot accept
nomination for engmt without enquiring
EVALUATE existing auditor – whether there is
SAFEGUARDS & OTHER pro/other reason for proposed change
SITUATION SIGNIFICANCE
RELEVANT POINTS of which he should be aware before
OF THREAT
deciding whether to accept aptmt
CLIENT ACCEPTANCE o If there are: request existing auditor
Accepting new client • Threat to integrity: • Obtain knowledge & understanding of to provide details necessary to
rship questionable issues client, its owners, managers & those enable him to come to a decision
related to client e.g. responsible for its govn & business • When sending tender (reply to
o Client involve in activities requests to send it) – state that contact
illegal activities • Secure client’s commitment to improve with existing acct will be req (before
o Dishonesty corp govn practices/internal controls accept engmt) so inq may be made as
o Questionable fin • Review acceptance decisions to whether there are pro/other reasons
rep practices periodically for recurring engmt why aptmt should not be accepted
• If no safeguard: decline to enter into • Ask existing acct to provide known info
client rship on any facts/circums that needs to be
aware of before deciding whether to
ENGAGEMENT ACCEPTANCE accept engmt
• Obtain info from other sources
To provide only those • Self-interest threat to • Acq approp understanding of nature of
• If no safeguard: decline engmt
services that pro competence & client’s business, complexity of ops,
PA in public practice is due care: specific req of engmt and purpose,
Asked to undertake • Threats to pro • Notify existing acct of proposed work,
competent to perform o Engmt team not nature and scope of work to be
work that is competc & due care which would give existing acct
possess/acq performed
complementary or o Lack opportunity to provide relevant info
competencies • Acq knowledge: relevant industries
additional to work of of/incomplete info needed for proper conduct of work
necessary to • Possess/obtain experience with relevt
existing accountant
properly carry out reg/rep req
engmt • Assign sufficient staff with the
Notes:
necessary competencies.
• Whether PA is permitted/required to discuss affairs of a client with a proposed acct depend on:
• Use experts where necessary
o Nature of the engagement
• Agree on realistic time frame to
o Whether client’s permission to do so has been obtained
perform engmt
o Legal/ethical req relating to such comm & disclosure
• Comply with QC policies & procedures
• PA need to obtain the client’s permission (preferably in writing) to initiate discussion with an
designed to provide reasonable assur
existing acct:
that specific engmt are accepted only
o Permission refused: decline appointment
when they can be performed
o Permission obtained: existing acct shall comply with relevant legal & other reg governing such
competently
requests.
• If to rely on advice/work of expert –
- Where the existing accountant provides information, it shall be provided honestly and
determine whether reliance is
unambiguously
warranted, consider:
- If unable to comm with existing acct, proposed acct shall take reasonable steps to obtain
o Reputation rd
info about any possible threats by other means e.g. through inquiries of 3 parties or
o Expertise
background investigt of senior mgmt/those charged with govn of client
o Resources available
o Applicable pro & ethical standards

CHANGES IN A PROFESSIONAL APPOINTMENT

Asked to • Threat to pro • May require direct comm with existing
replace/consider competc & due care: acct to est facts & circums regarding
tendering for engmt o Accepts engmt proposed change – so can decide
currently held by anor before knowing all whether approp to accept engmt
PA in public practice pertinent facts o E.g. reasons for change in aptmt
may not fully reflect facts, indicate
disagreemt with existing acct that
may influence decision to accept
CONFLICT OF INTEREST FEES AND OTHER TYPES OF REMUNERATION
EVALUATE EVALUATE
SAFEGUARDS & OTHER SAFEGUARDS & OTHER
SITUATION SIGNIFICANCE SITUATION SIGNIFICANCE
RELEVANT POINTS RELEVANT POINTS
OF THREAT OF THREAT
Accepting new • Threat to obj: • Notify client: firm’s business FEES
client/continue o PA competes interest/activities that may rep a COI &
Enter into nego • Self interest threat to • Make client aware of terms of engmt
rship/specific engmt directly with client obtain consent to act in such circums
regarding pro services pro competc & due particularly basis on which fees
o PA has JV with • Notify all known relevant parties: PA is
care: charged & which services covered by
major competitor acting for ≥2 parties in respect of
o Fee quoted so low quoted fee
of client matter where their resp interests are in
that it may be • Make client aware of statutory duties &
• Threat to obj/confid: conflict & obtain consent to so act
difficult to perform resp involved in respect of engmt
o PA performs • Notify client: PA doesn’t act exclusively
engmt in acc with • Assign approp time & qualified staff
services for for a client in provision of proposed
app tech & pro
clients whose services (e.g. in particular market
standards for that Fees charged for assur engmt should be
interests are in sector/specific service) & obtain
price fair reflection of value of work involved &
conflict or clients consent to so act
should take into account:
are in dispute with • If consent asked is refused: PA shall
• Skill & knowledge required for type of
each other in not continue to act for one/more
work involved
relation to matter conflicting engmt
• Level of training & experience of
or transact in • If no safeguard: (threat to ≥1 fundm
persons necessarily engaged on work
question principles) Resign from one/more
• Time necessarily occupied by each
conflicting engmt
person engaged on work
• Degree of resp & urgency work needs
Additional safeguards:
• Use of separate engmt teams
• Procedures to prevent access to info CONTINGENT FEES
e.g. strict physical separation of teams, Contingent fees widely • Self-interest threat to • Advance written agreemt with client as
confid & secure data filing used for certain types obj depends on: to basis of remuneration
• Clear guidelines for members of engmt of non-assur engmt o Nature of engmt • Disclosure to intended users of work
team on issues of security & confid o Range of possible performed by PA & basis of
• Use of confid agreemt signed by fee amount remuneration
employees & partners of firm o Basis for • QC policies & procedures.
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• Regular review of app of safeguards by determining fee • Review work by obj 3 party
a senior individual not involved with o Whether outcome
relevant client engmt of transact
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reviewed by 3
party
SECOND OPINION
REFERRAL FEES OR COMMISSIONS
SAFEGUARDS & Fee received for • Self-interest threat to • Disclose to client any arrangmt to pay
EVALUATE SIGNIFICANCE
SITUATION OTHER referring a continuing obj and pro competc referral fee to anor PA for work referred
OF THREAT
RELEVANT POINTS client to another & due care: • Disclose to client any arrangmt to
PA is asked to provide • Threat to pro competc & due care: • Seek client PA/other expert o To receive such receive a referral fee for referring client
nd nd
2 opinion on app of o 2 opinion not based on same set permission to contact fee/commission to anor PA
accounting, auditing, of facts that made available to existing acct Receive commission o Pay referral fee to • Obtain advance agreemt from client for
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rep or other existing acct or based on • Describing limitations from 3 party (e.g. obtain client e.g. commission arrangmt in connection
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standards/principles to inadequate evidence surrounding any software vendor) in client continues with sale by 3 party of goods or
specific circums or o Existc & signf of threat depends on opinion in comm with connection with as a client of anor services to the client
transact by/on behalf circums of request & other available client sale of goods/services PA but req • PA may purchase all/part of anor firm
of co/entity that is not facts & assumptions relevant to • Provide existing acct to client specialist services on basis that payments will be made to
existing client expression of pro judgment copy of opinion not offered by individuals formerly owning the firm/to
existing acct their heirs/estates
MARKETING PUBLIC PRACTICE SERVICES GIFTS AND HOSPITALITY
EVALUATE EVALUATE
SAFEGUARDS & OTHER SAFEGUARDS & OTHER
SITUATION SIGNIFICANCE SITUATION SIGNIFICANCE
RELEVANT POINTS RELEVANT POINTS
OF THREAT OF THREAT
ADVERTISING OR MARKETING SERVICES PA or immediate/close • Self-interest/fam • If gifts/hospitality are offered that
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family member, being threat to obj: reasonable & informed 3 party would
Solicits new work • Self-interest threat to • PA shall not bring profession into
offered gifts & o If gift accepted consider trivial & inconsequential (after
through advert/other pro behaviour disrepute when advert/marketing
hospitality from client • Intimid threat to obj: weighing all the specific facts and
forms of marketing o Services, services
o possibility of such circumstances) PA may conclude that
achievmts/product • PA shall be honest & truthful and not:
offers being made offer is made in normal course of
marketed o Make exaggerated claims for
public business without specific intent to
inconsistent with services offered, qual possessed,
influence decision making/obtain info
that principle experience gained
• If no safeguard: shall not accept offer
o Make disparaging ref to
unsubstantiated comparisons to
work of anor
• If PA in doubt whether a proposed form
of advert/marketing is approp, shall CUSTODY OF CLIENT ASSETS
consider guidance from MIA
EVALUATE
SAFEGUARDS & OTHER
TENDERS SITUATION SIGNIFICANCE
RELEVANT POINTS
Public • Self-interest threat to • PA shall not respond to advert to OF THREAT
advert/unsolicited obj and pro competc tender for prowork unless PA has PA assume custody of • Self-interest threat to • Keep assets separately from
request to make & due care: established safeguards: client monies/other pro behavior/obj: personal/firm assets
submission or submit o To receive such o Have sufficiently qual & skilled staff assets (only if o Hold client’s • Use assets only for intended purpose
tender for pro services fee/commission to undertake engmt permitted by law) assets • Ready to account for those assets &
o Pay referral fee to o Disclosing basis on which fees any income, dividends/gains
obtain client e.g. charged & which services covered generated, to any persons entitled to
client continues by quoted fee such acctg – at all times
as a client of anor o If appointmt may result in • Comply with all relevant laws & reg
PA but req replacement of another PA, state in relevant to holding of & acctg for asset
specialist services submission/tender that before • Make approp inquiries about source of
not offered by acceptance, opportunity to contact assets & consider legal & reg
existing acct other PA req so that inquiries may obligations
be made as to whether there are
proreasons why appointmt should
not be accepted & if
submission/tender is successful,
OBJECTIVITY
contact existing acct in acc with
applicable provisions in S210 EVALUATE
SAFEGUARDS & OTHER
SITUATION SIGNIFICANCE
RELEVANT POINTS
OF THREAT
Having interests in, or • Fam threat to obj: • Withdraw from engmt team
rship with, a client or o Family/close • Supervisory procedures
its directors, officers or personal/business • Terminate fin/business rship giving rise
employees rship to threat
• Existence of threats • Discuss issue with higher levels of
to obj when providing mgmt within firm.
pro service depend • Discuss issue with those charged with
upon particular govn of client
circums of engmt &
nature of work that
PA is performing