Learning objectives of Topic 2

Course tittle: Principles of Auditing

Topic 2 1. Outline the characteristics of auditing profession

2. Understand the role of Auditing Standards

Audit Environment 3. Understand the concept of professional ethics

4. Explain the fundamental principles of professional ethics

5. Explain the concept and importance of auditor independence

Lecturer: Nguyễn Hoàng Tố Loan

Auditing Department, School of Accounting, UEH 3

Prescribed Reading
Contents of Topic 2
Session Topic 1 Materials Exercises Notes

Audit Textbook (1): Chapter 2,3 Textbook (1): Chapter 2,3 1 Characteristics of auditing profession
3 environment
Textbook (2): Chapter 7 Workbook: Chapter 7
2 Auditing standards
Relevant Guidance (Quy định có liên quan)
1 Code of Ethics 3 Professional ethics
The Law on Independent Audit in Vietnam (2011) & Decree No.
2 17/2012/ND-CP

(Luật Kiểm toán độc lập (2011) và Nghị định 17/2012)

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1. Characteristics of auditing profession (1) Professional status of the auditor
Professional status of the auditor
5 common attributes:

Professional occupations can be distinguished by five common attributes:

Ø systematic theory Requirements:
Ø professional authority and expertise
Ø systematic theory: reliance on an underlying theory of accounting and auditing
v Responsibility
Ø community sanction
Ø expertise: professional authority and expertise v Professional competence
Ø regulative codes
Ø community sanction: ability to sanction members and control admission to the profession v Practice criteria
Ø well-established culture
Ø regulative codes: regulative codes in two areas, technical and ethical v Maintain public’s confidence
Ø well-established culture: behavioural subculture exhibiting integrity, independence,
objectivity, confidentiality and public interest.
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Nhöõng ñaëc ñieåm cuûa ngheà kieåm toaùn (tham khảo)

YÊU CẦU CỦA NGHỀ KIỂM TOÁN

§ Laáy lôïi ích cuûa ñoâng ñaûo ngöôøi söû duïng laøm muïc tieâu vaø muïc ñích hoaït ñoäng. Coâng khai coi
traùch nhieäm ñoái vôùi xaõ hoäi, ñoái vôùi vieäc baûo veä lôïi ích cuûa ñoâng ñaûo ngöôøi söû duïng hôn laø
nhöõng lôïi ích veà vaät chaát. Xem vieäc phuïc vuï xaõ hoäi coøn quan troïng hôn caû nhieäm vuï ñoái vôùi • Traùch nhieäm ñoái vôùi xaõ hoäi
khaùch haøng. Profession •Trình ñoä chuyeân moân
§ Phaûi coù caùc tieâu chuaån rieâng cho nhöõng ngöôøi muoán tham gia vaøo hoaït ñoäng naøy, vaø phaûi baûo
ñaûm chaát löôïng dòch vuï cung öùng. •Tieâu chuaån haønh ngheà
§ Ñöôïc chính phuû chính thöùc coâng nhaän, thoâng qua vieäc caáp giaáy pheùp haønh ngheà kieåm toaùn vieân.
§ Ñöôïc ñaøo taïo coù heä thoáng, phaûi coù kieán thöùc saâu roäng, vaø phaûi xem vieäc ñaùp öùng nhöõng yeâu caàu •Nieàm tin cuûa coâng chuùng
cuï theå cuûa xaõ hoäi laø muïc tieâu hoaït ñoäng.
§ Coù toå chöùc ngheà nghieäp rieâng.
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CĐ: Đạo đức nghề nghiệp KTV
 Characteristics of auditing profession 3. Codes of Ethics
Requirements from Regulations
3.1 Professional ethics and ethical theory
v Requirements of Public 3.2 Purpose of the code of ethics
Auditing Standards
3.3. Fundamental principles of professional ethics
v Requirements of Government
Auditor’s responsibility
v Requirements of Professional Group working
bodies
Codes of Ethics

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2. Auditing Standards 3.1. Professional ethics and ethical theory

vA quality control tool What is Professional Ethics ?

vAuditing standard setters
Ø Professional bodies v Ethics are concerned with the requirements for the general
Ø Government well-being, prosperity, health and happiness of people.
vThe roles of auditing standard
ØTo auditors v It requires both knowledge of moral principles and also skills
ØTo users (eg., investors use auditor’s report for their decsions) in applying them to problems and decisions.
ØTo public
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 Mở rộng thêm Mở rộng thêm

Khái niệm về đạo đức? The mirror test:

vÑaïo: leõ phaûi, ñöùc: ñieàu toát laønh, laø nhöõng nguyeâ n lyù (taéc) phaûi tuaân thuû trong
moái quan heä giöõa ngöôøi vôùi ngöôøi, giöõa caù nhaân vaø xaõ hoäi. Is it legal?
vÑaïo ñöùc coù theå ñöôïc ñònh nghóa chung laø toaøn boä caùc nguyeân taéc hay caùc giaù trò
luaân lyù, tinh thaàn chi phoái haønh ñoä ng cuûa con ngöôøi vaø laø cô sôû (neàn taûng) ñeå xaõ Is it right?
hoäi phaùt trieån beàn vöõng, toát ñeïp.

Laø nguyeân taéc ñöôïc chaáp nhaän ñeå phaân bieät haønh vi ñuùng, sai ñeå ñöôïc What will others think?
ngöôøi khaùc toân troïng.
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Mở rộng thêm Caùc nguyeân taéc ñaïo ñöùc & xung ñoät ñaïo ñöùc
Ngöôøi ñaø n oâ ng vaø con trai cuûa oâ ng ta ñi caâu-laàn ñi caâ u ñaà u tieân cuûa ngöôøi con trai
Ví dụ về đạo đức cơ bản hoâm ñoù laø moät ngaø y khoân g may hoï chaúng caâu ñöôïc con caù naøo caû. Ñeå laøm vui ngöôøi
con trai ngöôøi boá ñaõ daãn con cuøng mình vaøo vuøng caám caâu.
Ngoài caâu moät thôøi gian chaøn g trai nhoû beù ñaõ caâu ñöôc moät soá caù vaø trong ñoù coù moät
§ Söï trung thöïc con caù raát to-ngöôøi boá cuõng caâu ñöôïc moät soá caù nhaát ñònh. Luùc veà ngöôøi boá baûo con
trai: "Con thaâ n meán chuù ng ta phaûi thaû heát soá caù naøy ra thoâi"."Taïi sao aï?" ngöôøi
con trai hoûi.” Bôûi vì chuùn g ta ñang ôû trong vuø ng caám caâu, con say söa quaù neân con
§ Treân kính, döôùi nhöôøng
khoâng chuù yù ñaáy thoâi". "Nhöng ñaâu coù ai thaáy chuùng ta ôû ñaây ñaâu ba?".
§ Tính coù traùch nhieäm (Responsibility)
"Ñoù chính laø ñieàu maø boá muoán nhaán maïnh vôùi con ñaáy, ñaïo ñöùc laø chuùng ta laøm vieäc toát
§ Löông thieän, thaúng thaén, coâng baèng, ngay thaúng ( Fairness) vaø ñuùng ngay caû khi khoâng coù ai chöùng khieán haønh ñoäng ñoù cuûa chuùng ta caû".

§ Tuaân thuû nghóa vuï coâng daân (citizenship)

Caäu beù sau naøy lôùn leân duø ñaõ ñi caâu raát nhieàu nhöng chöa khi naøo caâu ñöôïc con caù to
§ ….. 14 nhö trong laàn ñaàu tieân caäu ñi caâ u caû, nhöng baøi hoïc veà ñaïo ñöùc cuûa ngöôøi cha thì ñaõ in
trong ñaàu caäu ñeân suoát cuoäc ñôøi. 16
 Mở rộng thêm

Khái niệm về đạo đức nghề nghiệp? 3.2. Purpose of the code of ethics
Ví dụ: ĐĐ Kinh doanh ĐĐ Luaät sö

ĐĐ Y khoa ĐĐ Nghề nghiệp Kieåm toaùn
v Ñaïo ñöùc ngheà nghieäp laø nhöõng quy taéc höôùng daãn cho caùc thaønh vieâ n öùng xöû vaø
hoaït ñoäng moät caùch trung thöïc, phuïc vuï cho lôïi ích chung cuûa ngheà nghieäp vaø xaõ hoäi.
v Code of ethics: formal, systematic statement of rules,
principles, regulations or laws developed by a community to
promote its well-being and punish undermining behaviour.
v The code therefore:
Ømakes explicit the values implicitly required

v Ñaïo ñöùc ngheà nghieä p yeâu caà u caàn coù hieåu bieát veà nguyeân taéc chi phoái tinh thaà n, Øindicates how members should act towards one another

caàn coù naêng löïc ñeå aùp duïng chuùn g trong vieäc giaûi quyeát vaán ñeà vaø ñöa ra caùc quyeát Øprovides an objective basis for sanctions.
ñònh. 19
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3.1. Professional ethics and ethical theory

3.3. Fundamental principles of Professional Ethics
Ethical theory v Chính trực
v Khách quan
v Teleological ethics: deal with the consequences or outcomes Thuyeát muïc ñích v Năng lực chuyên môn
of actions: (cöùu caùnh) & tính thận trọng
Ø Generally, if the benefits of a proposed action outweigh the v Tính bảo mật
costs, the decision is morally correct. v Tư cách nghề nghiệp

v Deontological ethics: based on duties and rights: v Tính độc lập

Thuyeát về nghĩa vụ
Ø Duties and rights are set down in rules that must be
followed.
v Virtue ethics: focus on personal qualities, such as the Thuyeát về phẩm chất
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integrity of the decision maker.
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 The five threats to independence
Auditor independence
Threat Description Example
Self-interest Auditor has financial or other Auditor owns shares or loans money
interest in organization to organization
vIndependence is a key characteristic of an audit or assurance
Self-review Auditor reviews own work Auditor installs payroll system then
service provider. reviews it during audit
Advocacy Auditor involved in Encouraging investors to buy bonds
vIn order for auditors to add credibility to financial reports or promoting client or shares of organization

other subject matter, they need to remain independent. Familiarity Auditor too familiar with, or Senior manager of an organization
long relationship with, becomes the auditor; Auditor spent
employees, officers, directors too many years on same audit

Intimidation Auditor intimidated by Auditee threatens to change

management or directors auditors if unhappy with audit results
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Based Approach (Cách thức xây dựng) Group working

Listen the following videos (in LMS) and answer questions.
vVideo 1: Professionalism, integrity and objectivity. (Link 1)
è Questions: In your understandings, what are professionalism, integrity and objectivity? Why
Rules
do these principles relate to the independence?
based
Ø Rules based approach
(Quy ñònh chi tieát) vVideo 2: Professional competence and Due care. (Link 2)
è Questions: In your understandings, what are professional competence and due
Ø Principles based approach
Principles care/diligence? What are relationship between competence and diligence?
(Xaùc laäp nguyeân taéc) based

vVideo 3: Independence (Link 3)

è Questions: In your understandings, what are professional competence and due

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care/diligence? What are differences between independence in facts and independence in
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appearance?
 Group Discussions Group Discussions
vVideo 1: Professionalism, integrity and objectivity. (Link 1) vVideo 3: Independence (Link 3)
è Questions: In your understandings, what are professionalism, integrity and objectivity? Why è Questions: In your understandings, what are professional competence and due
do these principles relate to the independence? care/diligence? What are differences between independence in facts and independence in
appearance?

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Group Discussions
vVideo 2: Professional competence and Due care. (Link 2)
è Questions: In your understandings, what are professional competence and due
care/diligence? What are relationship between competence and diligence?

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