Ethical Principles and Independence in Audit - Desklib

2018
AUDIT

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By student name
Professor
Date: 17th Sep, 2018.
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CONTENTS:
Question 1...........................................................................................................3
Question 2.........................................................................................................................5
References.............................................................................................................................7
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Answer to Question 1:
As per APES 110, there are a set of ethical principles that must be adhered to by an auditor
during performing his duties for his client. During discharging their duties, the auditors are
expected to uphold the highest standards of professional judgement and should inculcate
principles of integrity and professional conduct all throughout the audit (Abdullah & Said, 2017).
The below mentioned instances highlight a few scenarios that involved ethical dilemmas or
issues that the auditor may have faced during performing the audit:
a) In the given case, the client in recognition of Peter’s audit services to the company over a
period of six years has offered to gift him a discount voucher of 25 percent on the
purchase price of the tickets. If Peter goes on to accept the gift, this would tantamount to
professional miss-conduct as it violates the laid down principles of code of ethics and
could hamper the level of independence and alter his professional judgement. Therefore,
such perks are to be avoided by the auditor to maintain the sanctity of the profession.
Hence discounted priced tickets should not be accepted by the auditor (Boghossian,
2017).
b) Gerona Company has appointed Jana to render his audit services and he has continued to
be the auditor for the same industry for the past three continuous years. By no means
there is any violation of ethical principles as there are no restrictions on taking up an
audit engagement in a company which is a part of an industry where the auditor has
served previously for several years. All that the auditor needs to do is to ensure that the
confidential information of the previous clients of the same industry that he has earlier
worked on is maintained and the integrity principles are not violated.
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