AUDIT 2

PUAN ROSLINA BINTI IDRIS

DAT5C
 NAME MATRIC NUMBER

WAN NURUL NISRIN BINTI WAN MOHD 04DAT19F1007

ZAMANI
SAMINI A/P SIVAM 04DAT19F1025

NURUL AIN QISTINA BINTI AHMAD 04DAT19F1031

NUR HAZIQAH BINTI MUHD AZMI 04DAT19F1037

NUR AINSYA AMALIN BINTI 04DAT19F1096

NORBANIZAM
FATIN NASUHA BINTI ABDULLAH 04DAT19F1028
 There are five fundamental
5.1 PROVIDE THE principles of ethics for
DISCUSSION ON THE professional accountants:
FUNDAMENTAL (a) Integrity
PRINCIPLES OF (b) Objectivity
ETHICS AND (c) Professional
PROFESSIONAL Competence and Due
Care
CONDUCT IN (d) Confidentiality
ACCORDANCE WITH (e) Professional
Behavior
MIA BY-LAW
 b) OBJECTIVITY
a) INTERGRITY
 Principle of objectivity: not to
● The principle of integrity is be compromise their professional
straightforward and honest in judgment because of bias, free of
professional and business conflict of interest and influence by
others
relationship. Integrity also implies fair
 A member shall be and be seen to be
dealing and truthfulness. free of any interest which cause
● No member shall make false and problem to his objectivity.

misleading report. For example: pressure, multiple services

c) PROFESIONAL COMPETENCE
AND DUE CARE
● Strive continually to improve his
professional services, keep his
technical knowledge up to date,
enhance professional competence.
● Members shall not undertake
professional work which he is not
competent to perform unless the
member obtains such advice and
assistant as will enable him to carry
out the work completely.
 Comply with Continuing Professional
Education (CPE) requirement, standards
and guidelines issued by MIA council.
 Due care means should conduct with
courtesy and responsible toward person
who engage him and also to the public.
 It also includes consideration of
completeness of working paper,
sufficiency of audit evidence,
appropriateness of audit report
d) CONFIDENTIALITY
● To treat client information acquired as
confidential - cannot use or appear to use
that information for his personal advantage
or third party advantage.
Example: Members dealing in the shares of
the company using information obtained
during his engagement.
Confidential information of the client shall
be not disclosed except:
1. Consent to do so obtained from client
2. There is legal right or duty to disclose.
3. Provisions of written law (non-
compliance, criminal act)
e) PROFESSIONAL BEHAVIOUR
• to comply with relevant laws and
should also perform the job to
maintain good name of institute
(MIA) as well as other members.
• Auditor should refrain from acting
in a manner that would discredit
the profession.
• Auditors also required to take
consideration of how they promote
their services
5.2 Examine the importance of professional
ethics
The accountancy profession presents its idea of ethical behaviour as comprising five
fundamental principles that form a framework for behaving ethically in the professional and
business environment. It recognizes the importance of ethical behaviour in its codes of
ethics and training. The Codes of Ethics of the IFAC generally adopts a principles-based
approach. That is, underlying the detailed guidance in the IFAC Code is a core requirement
that all professional accountant should behave in accordance with five fundamental ethical
principles in their professional and business activities. The five fundamental principles are
integrity, objectivity, professional accountants and due care, co confidentiality , and
professional behaviour. Professional accountants may need to assess potential actions in
terms of threats to adherence to those principles and where necessary, apply safeguard or
refrain from activity.
The accounting profession is responsible for taking into account the public
interest. Integrity and ethics must be at the heart of professional life achieve
public trust, therefore, promoting trust and integrity. There is an expect or
even demand an ethics-based culture by its members, based around
underlying values of integrity, transparency and expertise. It is important for
such behaviour to be adopted by all those in the profession and in other
business activities, particularly throughout financial reporting chain. Also, in
practical terms, professional accountants should not be associated with
reports, returns, communications or other information where they believe
that the information:
(a) Contains a materially false or misleading statement;
(b) Contains statements or information furnished recklessly; or
(c) Omits or obscures information required to be included where such
omission or obscurity would be misleading.
It seems that the behavioural characteristics expected of someone behaving
with integrity in a professional context should be as follows:
(a) Be straightforward, honest, and truthful (including to oneself). This is an
important ingredient of being seen to be credible and reliable;
(b) Deal fairly. This means behaving in accordance with the norms expected
by the profession, or personal values if higher. It includes treating people
on the same basis, without basis;
(c) Comply with the spirit as well as the letter of laws and regulations;
(d) Take into consideration the public interest;
(e) Show consistency in handling tasks;
(f) Be open-minded and open to consider new information and ideas; and
(g) Take corrective action, if necessary.

Accounting and auditing calls for high levels of integrity and honesty.
5.3: Provide the explanation on the concept of independence and its
importance :
-The independence provisions of the Code should seek to strike an appropriate balance
between strengthening public perception of the integrity and objectivity of an audit, while
still enabling auditors to carry out their work efficiently and not inhibiting commercial
activity i.e. they need to be proportionate.-Ensuring auditor independence is as important as
ensuring that revenues and expenses are properly reported and classified. If the auditor's
independence is impaired then the company has not satisfied the requirement to file
financial statements audited by an independent accountant.-Auditor independence is part of
the foundation of the auditing profession. An independent, reliable, and ethically sound
audit gives a company credibility and allows the public to trust in the accuracy of the results
and the integrity of the accounting profession.
5.4 PROVIDE ● INDEPENDENCE
THE - Independence is an essential
SITUATIONS requirement for certain types
THAT CAN of Icon assurance engagements,

INFLUENCE such as the external audit or

INDEPENDENC review of a financial report.

E IN
APPEARANCE  Independence requires:

AND IN FACT ● Independence in Appearance

● Independence in Fact
INDEPENDENCE IN APPEARANCE
Independence in appearance is the
avoidance of facts and circumstances
that are so significant that a
reasonable and informed third party,
having knowledge of all relevant
information, including applied, would
reasonably conclude a firm's, or a
member of the assurance teams',
integrate, objectivity or professional
scepticism had been compromised
INDEPENDENCE IN FACT
Independence in fact is a state of
mind that permits the provision of an
opinion without being affected by
influences that compromise
professional judgment, allowing an
individual to act with integrity, and
exercise objectivity and professional
scepticism.