AUDIT ASSIGNEMNT 3

HAMNA WAHAB
22443

Q1. Referring to the International Standard of Auditing ISA-220, discuss the meaning of ‘a
system of Quality control’ and what is the responsibility of engagement teams in this
regard?

ISA 220 deals with the responsibilities of the auditors with regards to quality control while
auditing financial statements of a company. The ISA states that the firm has an obligation in
ensuring that the audit firm, itself, and its personnel conform to professional standards,
applicable legal requirements (ISQC 1) and maintain quality control throughout the audit.
The obligation of quality control exists also to maintain reasonable assurance that the
reports issued by the auditing firm are appropriate, and free of incorrect interpretations by
the auditors.
ii)
Quality Control Reviews are carried out to enhance the credibility of the
accountant/auditing firms in relation to the reports issued by them. It is to ensure that the
audit engagements conducted are in line with the acceptable auditing standards i.e., ISA,
and whether the relevant ethical and legal requirements have been fulfilled. QCRs are also
important in evaluating whether systems of quality controls by the firms have been
designed, adopted, and maintained in line with the ISQC 1 stated in ISA 220. The auditing
firm’s quality control procedures must be properly applied so the reports issued by the firms
can be deemed appropriate in the circumstances.

Q2. Make a Comparative analysis of the Code of Ethics and Conduct of the following Local
and International institutions: [Try to find a few similarities, differences, and any point of
focus in their code of ethics].
i. Universities’ student code of conduct (choose anyone): IBA or LUMS
ii. Local Professional bodies (choose anyone from this): ICAP or ICMA
iii. International Professional bodies (choose anyone from this): ACCA or CIMA

(i) Universities student code of conduct

A code of conduct is set of rules and policies for an organization’s staff, employees,
students, and the people who represent it to follow. It keeps the flow of operations smooth
and helps to prevent and punish inappropriate occurrences. The code of conduct of MIT and
IBA has many similarities and follows and outlines quite the same practices. Both
universities are renowned and well known for the quality education and experience they
provide to their students, and it is important for any organization to have a code of conduct
in place and have procedures with which it functions.

The respect for the rights, dignity, and differences between each other is deemed very
important at organizations where people come together from multiple walks of life. IBA and
MIT both host a multitude of students and considering the widespread discrimination based
on race, gender, color etcetera, the existence of a code of conduct for ethics and attitude
towards others is vital. Both varsities encourage integrity, teamwork, and discipline. The
aspect of teamwork shows not only discouragement of bias but also the acceptance of
people of different backgrounds and classes. There is a fine line between not discriminating
others, and accepting them, and it is pleasing to see universities expecting both from the
people who represent them.

Similarly, both IBA and MIT encourage honest and ethical behaviour in classes, exams,
identity of students etcetera. Both also have strict guidelines for attendance and
professional behaviour inside the varsity premises.

Some notable differences between the code of conduct of both universities are as follows:

IBA MIT
Both institutes hold rigid codes that concerns plagiarism, cheating in exams, and any
means of manipulations like fabrication or falsification.

Both institutes hold policies against any kind of harassment; physical or verbal, any kind of
misconduct and possession of weapons and fireworks.
For reporting a harassment case/ issue, both institutes have an extensive procedure.

Both institutes require that the campus ID card must be with the students at all time, when
on campus.
With regards to public display of affection, MIT does not forbid public display of
IBA holds a policy that firmly disapproves of affection, however the policy mentions that
it. romantic relationships and professional
relationships must be kept separate at all
terms.
IBA does not allow smoking on the campus. MIT policies regarding smoking on campus
Drugs and illicit substances are also are not quite clear but consumption of
prohibited. drugs and possession of illicit substances
are strictly prohibited.
IBA abides with the dress code which does MIT doesn’t have a particular detailed dress
not permit sleeveless clothes, slides and code.
shorts on campus.

(ii) Local Professional bodies:

ICMAP CIMA
Both codes stress highly over sincerity and sense of responsibility among members within
their practices.

The code is applied over all accounting American Institute of CPAs (AICPA) and
bodies and its members, those related to Chartered Global Management Accountant
ICMAP. (CGMA) are enclosed within this code
 Both indicate a chance of risk to confirm with the code due to some biasness, any kind of
dissonance, intimidation or any extra aid.

Both consists of a section for grievances, informing of a procedure to notify any

complaints, problems or any other matter concerning the members.

Both have severe legal implications/ consequences for violating the code.

The five core values are (ICMAP) The five core values are(CIMA)
 Clarity, explicitness  Integrity
 Competence  Objectivity
 Innovation  Professional expertise and
 Ethics appropriate general regards
 Professionalism  privacy
 Professional conduct
The code presents instructions regarding The code is more expressive, evaluating
specific matters and simply gives an over topics, speaking of independence,
overview on issues. professional assessment, dealing with
threats and other sorts of involvements.

(iii) International Professional bodies : ACCA VS SAIPA

Similarities between both include the 5 basic principles laid out for professional
accountants, i.e.,
1. Integrity – to display honesty in all professional and business relationships
2. Objectivity – not to let bias or conflict of interest cloud one’s judgement
3. Professional Competence and Due Care – maintaining professional knowledge based
on the current technical and professional standards
4. Confidentiality – to maintain the privacy of information received by means of
professional or business relationships
5. Professional behavior – complying to relevant laws and avoiding behaviour that
could result in loss of credibility of the profession
Accountants are also required to exercise professional judgement and skepticism, and
resolve ethical dilemmas using the conceptual framework, and their expertise and
experience in both the bodies ACCA the Association of Chartered Certified Accountants)
and SAIPA (The South African Institute of Professional).
Another similarity is that practices are outlined for accountants to follow, for example,
section 250 states and describes the effects and consequences of accepting inducements
like gifts, hospitality, donations etc. And how it could hinder the growth of the profession.
A notable difference between ACCA and SAIPA is that all new ACCA students and members
are asked to sign an undertaking stating that they will comply with its regulations and code
of ethics and conduct, whereas SAIPA has no such requirement.
ACCA also states and describes that accountants have a responsibility to minimize
environmental damage. They are required to impactful changes keeping in mind sustainable
development. However, SAIPA does not mention any such responsibility or role.