Assurance

Sample Questions (Part II)

CA Professional Stage: Knowledge Level

Disclaimer: These questions are not provided by ICAB and are designed to facilitate
the general understanding of the students.

Chapter 14: Codes of Professional Ethics

1. What is ethics? Why do professional accountants need to maintain ethics during

providing assurance services to the clients?
2. What is the difference between rules based ethical framework and principle
based ethical framework?
3. “There are a number of advantages of a framework of principles over a system
of ethical rules”- Explain.
Or, why principle based ethical framework is superior than rules based ethical
framework?
4. Describe the fundamental principles stated in the IFAC Code of Ethics?
5. Do you think that a professional accountant has a continuing duty to maintain
professional knowledge and skill? If yes, why?
6. There are so many professions in the world but why independence is so
important for the professional accountants?
7. Why does the Code of Ethics discuss independence in the light of the wider term
assurance engagements rather than focusing only on audits?
8. There may be some occasions where no safeguard is available for the
professional accountants to reduce the threats of independence to an acceptable
lower level; in such a situation what is appropriate for them?
9. What is the difference between independence of mind and independence in
appearance?
10. “The degree of independence required is highest for an audit engagement, with
less stringent requirements for non-audit engagements at an audit client, and
engagements at non-audit clients”-Explain.

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 11. Describe the six sources of threats that the professional accountants may face
with example.
12. Describe the two general categories of safeguards identified by the Code with
examples.
13. The time and the audit firm should be independent “during the period of the
engagement.” Write your answer by describing the duration of engagement.
14. “Professional accountants are expected to follow the guidance contained in the
fundamental principles in all of their professional and business activities whether
carried out with or without reward and in other circumstances where to fail to do
so would bring discredit to the profession”-Explain.
15. “Professional accountants are required to follow the spirit as well as the letter of
the guidance of the Code of Ethics”-Explain.

Chapter 16: Confidentiality

1. Why is it important to the professional accountants to maintain confidentially

regarding disclosure of client’s information?
2. When does it appropriate for the professional accountants to discuss client
matters with other members of staff from the same firm?
3. “The greatest risk of breach of confidentiality is likely to be accidental disclosure
rather than deliberate disclosure”-Explain.
4. How can the professional accountants prevent accidental disclosure of client’s
information?
5. Discuss the circumstances where the professional accountants are or may be
required to disclose confidential information as per the Code of Ethics.
6. “A professional accountant acquiring or receiving confidential information in the
course of his or her professional work should neither use, nor appear to use, that
information for his or her personal advantage or for the advantage of a third
party”- Write down your answer with some examples.
7. What is conflict of interest? If there is any conflicts of interest exist, what the
firm should do to accept or continue to act for an audit client?
8. Which safeguards the firm may apply to manage the conflict of interest to an
acceptable lower level to work objectively in an audit client?

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9. Discuss the term “Chinese Walls” in the context of maintaining confidentiality of
client’s information.