Financial Interpretation: Ethical Obligations and Liabilities of a Director

Financial interpretation
1 | P a g e

Table of Contents
Part 2 (a)......................................................................................................................................................3
Part 2(b).......................................................................................................................................................4
References...................................................................................................................................................6
2 | P a g e

Part 2 (a)
In regards to the provided case of James, there are certain ethical obligations, which were needed
to be followed by him while auditing the installed materials by Australian Building Association
(ABA). To elaborate it further, under Auditing Standard ASA 102 Compliance with Ethical
Requirements when Performing Audits, Reviews and Other Assurance Engagements, these
obligations has been clearly mentioned. Under Standard ASA 102 Compliance with Ethical
Requirements when Performing Audits, Reviews and Other Assurance Engagements A1 it
has been mentioned that the assurance practitioner, auditor, firm and engagement quality control
reviewer are to have respect to the appropriate requirement as mentioned under of APES 110
Code of Ethics for Professional Accountants (Auasb.gov.au, 2018). These are to be considered in
deciding if relevant ethical requirements referred in paragraph 6 of this Auditing Standard have
been addressed. In this context, if APES 110 Code of Ethics for Professional Accountants is
taken into consideration it can be noticed under Section 100 of the Code of ethics it has been
stated that it is the responsibility of accountancy professional to act in accordance to public
interest (apesb.org.au, 2010). Hence, it is required on the part of the member to particularly not
address the needs of an employer or a client.
From this context, it can be noticed that section 100 of APES 110 Code of Ethics for
Professional Accountants has not been abided in the provided case of James. The reason being,
in the provided scenario, James, he specifically catered to the needs and requirements of Greg
Burton, the owner and director of Burtons Builders. As a result, of this, he failed in acting as per
his ethical obligations as specified under section 100 of APES 110 Code of Ethics for
Professional Accountants. This made it essential for James to act in favour of public interest,
which made it essential for him to provide with accurate report of the report i.e. the use materials
were highly dangerous.
In order to identify his ethical obligations Auditing Standard ASA 102 Compliance with
Ethical Requirements when Performing Audits, Reviews and Other Assurance
Engagements, requires further consideration. Under the ethical requirements, Para 6 it has been
stated that it is required on the part of the auditor to comply with ethical requirements that has
been mentioned in Para A1-A7, while performing reviews, audits along with other assurance
3 | P a g e