Detailed Case Study Analysis: Applying APES 110 Ethical Standards

This report presents a detailed analysis of three case studies based on the APES 110 Code of Ethics for Professional Accountants. The first case examines a potential conflict of interest under section 220, discussing safeguards to mitigate risks. The second case focuses on professional appointments under section 210, highlighting the importance of thorough due diligence when appointing new auditors. The third case delves into section 330, addressing the principle of acting with sufficient expertise, and examines a scenario where a chartered accountant's actions potentially violate this principle. The analysis incorporates relevant references to the APES 110 code and academic journals, providing a comprehensive understanding of ethical considerations in accounting practice, with a focus on auditor independence and professional competence.

AUDIT

Table of Contents
MAIN BODY...................................................................................................................................1
a) Case study on section 220 (Conflict of Interest).....................................................................1
b) Case study based on Section 210 (Professional Appointment)..............................................1
c) Case study based on Section 330 (Acting with sufficient expertise).....................................1
REFERENCES................................................................................................................................3

MAIN BODY
a) Case study on section 220 (Conflict of Interest)
APES 110 code is issued by the accounting professional and ethical standards. The code
based on the code of ethics for professional standards (APES 110, 2010). Conflict of interest
section 220 covered by APES 110 for the circumstances rises to the conflicts, application of one
of the safeguards are as follows-
 Represent a conflict of interest and find their consent that are advising the clients of the
organisation's operations interest and activities to act in such circumstances.
 Notifying that the related parties and the member associated with public practice where
their respective interest are in conflict
This case related the principle of integrity considered under fundamental principles that
says “ Integrity to be straightforward and honest in all professional and business relationships”.
There is a possibility that to conflict of interest covered under Accounting professional & ethical
standards 110 can affect.. This case scenario not properly related with violation because it is not
mentioned that auditor peter sung take tickets (APES 110, 2010). But in the future it may
possible that the policy of conflict of interest may breach, if he take discount offer from the
musical company pty ltd. In exchange of unethical consideration or any unprofessional benefits
to company. So if in case circumstances occur in future than the above safeguards will be
applicable to the organization to reduce possibilities of breach of conflict of interest under
section 220 of APES 110.
b) Case study based on Section 210 (Professional Appointment)
There is no violation of breach of policy considered in the particular case but the aspects
needs to considered while appointing new member to organisation. Section 210 (Professional
Appointment) of APES 110 Code of Ethics for Professional Accountants applies on the situation
given in case study which states that auditor Jana Went is appointed for the audit of Gerroa
Company for the first time but has been engaged in auditing other companies for past three years
(Carey, Monroe and Shailer, 2014). According to section 210 changes in professional
appointment, while replacing a member in public practice, existing accountant should fully
reflect all the relevant facts before accepting appointment because this can lead threat to
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professional competence. Safeguards to this threat are conducting inquiries, acquiring necessary
information and facts from the existing accountant.
c) Case study based on Section 330 (Acting with sufficient expertise)
Professional competence and due care that is a fundamental principle under APES 110
may entertain in this case study. Accounting Professional and Ethical Standards Board (APESB)
issued APES 110 Code of Ethics for Professional Accountants. As given in the situation, client
requests chartered accountant Dack to help in installing inventory system but due to technicality
and time pressure he hires a computer inventory consultant without any assurance and approved
his work without taking review in practical scenario. This behaviour of Dack is violation of
Section 330 (Acting with sufficient expertise) of APES 110 Code of ethics for professional
accountants because he is a member in business and a member in business can not deliberately
misguide an employer to experience possessed, neither he can carry out important tasks for
which assistance required without having any specific training and experience. Situations that
can lead to a threat for member in business depends on factors like they do not having adequate
time, information, resources, training/education to execute duties properly (Han Fan, Woodbine
and Cheng, 2013). Member in business should go for safeguards to reduce threats like they
should apply relevant supervision and review to the work and obtaining help from person having
essential expertise.
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REFERENCES
Books and Journals:
Carey, P. J., Monroe, G. S. and Shailer, G., 2014. Review of Post‐CLERP 9 Australian Auditor
Independence Research. Australian Accounting Review. 24(4). pp.370-380.
Han Fan, Y., Woodbine, G. and Cheng, W., 2013. A study of Australian and Chinese
accountants’ attitudes towards independence issues and the impact on ethical
judgements. Asian Review of Accounting. 21(3). pp.205-222.
APES 110, 2010. [online]. Available through
:<https://www.apesb.org.au/uploads/standards/apesb_standards/standard1.pdf >.
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