B1. Code of Ethics AAA

CODE OF ETHICS
Advanced Audit and Assurance

(AAA)
2
1 2 3 4 5
Fundamental Ethical Threats Safeguards Resolving Professional
Ethical Ethical Conflicts Scepticism
Principles
6
Provision of
Non-audit
Services to
Audit Clients
OVERVIEW
1. FUNDAMENTAL ETHICAL
PRINCIPLES
4
CODE OF ETHICS
International
Federation of
> IESBA’s International Code of Ethics for
Accountants
Professional Accountants is the basis for (IFAC)
the ACCA’s Code of Ethics and Conduct,
which all members and students must
follow
International Auditing International
and Assurance Ethics Standards
> The codes take a principles-based Standards Board Board
(IAASB) (IESBA)
approach and set out five fundamental
ethical principles
International Code of
Standards on Ethics for
Auditing Professional
(ISAs) Accountants
5
FUNDAMENTAL ETHICAL PRINCIPLES¹

- RECAP
PROFESSIONAL COMPETENCE AND
INTEGRITY OBJECTIVITY
DUE CARE
> Be straightforward and honest in > Do not allow bias, conflict of > Attain and maintain professional
professional and business interest or undue influence of knowledge and skill
relationships others to compromise professional
> Act diligently in accordance with
judgement
standards
CONFIDENTIALITY PROFESSIONAL BEHAVIOUR
> Do not disclose or use confidential > Comply with laws and regulations
information acquired as part of
> Avoid conduct that might discredit
professional relationship without
the profession, including marketing
authority unless there is a legal or
activities
professional duty or right to
¹ACCA Code of Ethics and Conduct

6
THE ACCA CONCEPTUAL FRAMEWORK APPROACH
> The ACCA conceptual framework identifies many situations that would threaten
and auditor’s ethical principles, such as an auditor being too familiar with their
client
> The approach taken in the framework is set out below
CATEGORISE THE THREAT IMPLEMENT SAFEGUARDS
> So that members can identify the > Where threats are significant,
threat, evaluate its significance safeguards must be implemented to
and respond to it appropriately either eliminate the threat or reduce
them to an acceptable level
2. ETHICAL THREATS
8
CATEGORIES OF THREATS - RECAP

Threat Explanation
The auditor has a financial or other self-interest in their client, they have an incentive to
Self-interest
keep the client happy for their own personal benefit
The auditor reviews data that they were involved in preparing and therefore cannot be
Self-review
objective about it, they may be reluctant to flag any errors it contains
The auditor represents the client or promotes their position so can no longer be seen to
Advocacy
be objective, they are ‘on their client’s side’
The auditor has a close or long-standing relationship with a client, making them too
Familiarity
trusting and not sceptical enough
Intimidation The auditor is being pressured to act in a certain way to avoid a threat being carried out
The auditor is involved in making management decisions and judgements, causing them
Management
to lose objectivity relating to those decisions, and to be perceived as biased
9
SELF-INTEREST THREATS
Close Owning
Undue fee
business shares in a
dependence
relationship client
Overdue > A financial or other interest that will inappropriately

Loans to or Gifts and influence the judgement or actions of the auditor
fees from a
from a client hospitality
client
Referral fees Contingent

Employment
for non-audit fees
with client
services
10
EXAMPLES OF SELF-INTEREST THREATS
Close Owning > Arises when the fees from one client are a large
Undue fee proportion of:
dependence – the firm’s fees
relationship client
– one partner’s fees or
Overdue – one office’s fees
Loans to or Gifts and
fees from a > It will not be in the auditor’s interest to lose the
client client
> The auditor may overlook adjustments that would
Referral fees Contingent be necessary to the financial statements
Employment
for non-audit fees
with client
services
11
Safeguards:
Close Owning
Undue fee For unlisted clients:
dependence
relationship client > Reduce dependency on the client for fees for
example by increasing the client base
Overdue > Have an independent partner review the work
fees from a performed on the audit
client

Employment
for non-audit fees
with client
services
12
Safeguards:
Close Owning
Undue fee For listed clients or ‘Public Interest Entities’:
dependence
relationship client > Where total fees are more than 15% of the firm’s
total fees for 2 consecutive years
Overdue – Disclose this to those charged with governance at
fees from a the client
client – Carry out an independent pre- or post-issuance
review of the work performed on the audit
Employment
for non-audit fees
with client
services
KEY DEFINITION: 13
PUBLIC INTEREST
ENTITIES (PIES)
A ‘Public Interest Entity’ or PIE is:

> Listed
> Defined by regulation or legislation as public
interest
> Audited under the same independence
requirements as a listed entity
> An entity with a wide range or significant
number of stakeholders, e.g. banks or
insurance companies
This Photo by Unknown Author is licensed under CC BY-ND

14
Close Owning > The auditor and client have an inappropriately

Undue fee close business relationship
dependence
relationship client – For example, if the audit firm enters into a joint
business venture with the client
Overdue > The auditor stands to benefit if the client is

Loans to or Gifts and successful
fees from a
client > Purchase of goods and services from a client by
the firm or a team member in the normal course of
Referral fees business, on normal terms, is not usually a
Employment Contingent threat
for non-audit fees
with client
services
15
Safeguards:
Close Owning
Undue fee
business shares in a > Do not enter into a close business relationship
dependence
relationship client with an audit client unless it is immaterial and
insignificant to the firm
Overdue > If purchases of goods or services from the client
fees from a by a team member are material:
client – remove that person from the audit team or
– require them to reduce number of transactions they
Referral fees enter into with the client
Employment Contingent
for non-audit fees
with client
services
16
Close Owning > The auditor will benefit if the value of their
Undue fee investment increases
dependence
relationship client > Audit adjustments which would not achieve this
may be overlooked
Overdue > The following are not allowed to own a direct
fees from a interest, or a material indirect interest, in a client:
client – The firm or partner
– A member of the team, or the partner’s family
Referral fees Contingent – Any other partner in the office (or their family)
Employment
for non-audit fees
with client – Other partners/managers providing non-audit
services services to the client
17
Safeguards:
Close Owning
Undue fee
business shares in a > Dispose of the interest
dependence
relationship client > Remove the individual from the team
> Independent partner review of the audit work
Overdue
fees from a
client

Employment
for non-audit fees
with client
services
18
Close Owning > The threat and safeguards depend on whether the
Undue fee client is a bank/lender
dependence
relationship client > The following are unlikely to be a threat:
– Loans to the audit firm from a client that is a
Overdue bank/lender if they are immaterial and on normal
Loans to or Gifts and commercial terms
fees from a
client – Loans to team members from a client that is a
bank/lender

Employment
for non-audit fees
with client
services
19
Safeguards:
Close Owning
Undue fee > Where the audit firm has a material loan from a
dependence client that is a bank/lender
relationship client
– Have an independent review of the work performed
Overdue > The firm or team members should not enter into
fees from a any loan or guarantee with a client that is not a
client bank/lender
> Loans to audit clients are not permitted unless
Referral fees Contingent immaterial to both parties
Employment
for non-audit fees
with client
services
20
Close Owning
Undue fee
business shares in a > An audit client may offer the audit team goods,
dependence
relationship client services or hospitality, such as taking the team out
for a meal at the end of the audit
Overdue > This may influence the behaviour of the recipient
fees from a and create a familiarity, self-interest or intimidation
client threat

Employment
for non-audit fees
with client
services
21
Safeguards:
Close Owning
Undue fee
business shares in a > The auditor must politely decline gifts and
dependence
relationship client hospitality unless the value is trivial and
inconsequential
Overdue
fees from a
client

Employment
for non-audit fees
with client
services
22
Close Owning
Undue fee
business shares in a > Overdue fees are in substance the same as giving
dependence
relationship client a loan to a client
> A threat arises if a significant amount of fees are
Overdue still outstanding before the following year’s audit
fees from a report is issued
client

Employment
for non-audit fees
with client
services
23
Safeguards:
Close Owning
Undue fee
business shares in a > Ensure full or part payment of the fees is received
dependence
relationship client > Do not start or continue work on the following
year’s audit until this happens
Overdue > Have an independent review of the work
fees from a performed
client

Employment
for non-audit fees
with client
services
24
A threat arises when

Close Owning
Undue fee
business shares in a > the auditor receives a fee for referring a client to
dependence another provider for non-audit services
relationship client
> a team member is compensated for selling non-
Overdue audit services to an audit client
fees from a – a similar threat arises when a team member’s
client performance appraisal is evaluated on this
basis
Employment
for non-audit fees
with client
services
25
Safeguards:
Close Owning
Undue fee
business shares in a For referral fees received by the firm:
dependence
relationship client > disclose to the client (ideally their audit
committee), in writing, the arrangement for a
Loans to or Gifts and Overdue referral fee to be received
from a client hospitality fees from a > obtain advance agreement from the audit
client committee that the arrangement is acceptable

Employment
for non-audit fees
with client
services
26
Safeguards:
Close Owning
Undue fee For compensation/appraisal of team members:
dependence
relationship client > Revise the compensation or appraisal criteria
> Remove the individual from the audit team
Loans to or Gifts and Overdue > Have the work of the team member reviewed
from a client hospitality fees from a
client A key audit partner* may not be evaluated on, or
compensated for selling non-audit services to
their client
Employment
for non-audit fees
with client
services
27
KEY DEFINITION:
KEY AUDIT PARTNERS
* A key audit partner is:
> The engagement partner
> Engagement Quality Control Reviewer
> Other audit partners on the engagement team making key
decisions/judgements relating to the audit
– E.g., partner responsible for audit of a significant subsidiary
28
Close Owning
Undue fee > A member of the engagement team may be
dependence offered a position as an employee of the client
relationship client
> Their judgement will be affected by their incentive
Overdue not to jeopardise their potential future employment
Loans to or Gifts and at the client
fees from a
client

Employment
for non-audit fees
with client
services
29
Safeguards:
Close Owning
Undue fee > Establish policies and procedures requiring
dependence employees to notify the firm of any possible future
relationship client
employment with the client
Loans to or Gifts and Overdue > Remove them from the audit team
from a client hospitality fees from a > Perform a review of any significant judgements
client made by the team member

Employment
for non-audit fees
with client
services
30
Close Owning
Undue fee > The auditor’s fee is contingent upon a certain
dependence outcome e.g. calculated as a percentage of the
relationship client
client’s profit
Overdue > The auditor has an incentive to overlook audit
Loans to or Gifts and adjustments that may impact negatively on the
fees from a
from a client hospitality client’s profit
client

Employment
for non-audit fees
with client
services
31
Safeguards:
Close Owning
Undue fee > Contingent fees are not permitted for audit
dependence
relationship client engagements
> They are also not permitted for other non-
Loans to or Gifts and Overdue assurance work if
from a client hospitality fees from a – The fee is material to the firm
client – The outcome is based on judgements to be made
based on a material amount in the financial
Referral fees statements
Employment Contingent
for non-audit fees
with client
services
32
POTENTIAL SCENARIO
Question Answer
Ethical issues:
> Carlisle Ltd has been one of your audit clients for
many years, and is in the process of listing on the > Over-dependence on an audit client for fee income
stock market leads to a self interest and potentially an intimidation
threat for the auditor
> Fee levels have grown over the years, and are
now at the point where fees from this client > Your firm will be concerned about losing the client
represent 19% of the firm’s total fee income > The fee level exceeds the threshold in the code of
> Fees have grown mainly due to winning other, ethics (>15% of total fee income for two consecutive
non-audit, work for the client such as consulting, years)
advisory and transaction-based work > The level of fee dependence should be disclosed to
those charged with governance
Comment on the ethical issues arising
> Consider having an independent pre- or post-
issuance review
33
SELF-REVIEW THREATS
Preparing
accounting
records and
financial
Tax statements Design of IT
services systems/
Threats arise when:
controls > non-audit work is performed for a client, which is
then relied on as part of the audit
> work is performed by employees of the firm while
Self-review Staff loaned to on loan to the client
Internal threats client or client
audit staff joining the > client staff joint the audit firm
work audit firm
Performing
valuations that
will be included Corporate
in the financial finance
statements e.g.
pensions
34
SELF-REVIEW THREATS
The following are banned for audit clients:
Preparing
accounting > Accounting/booking keeping that is not of a
records and
financial routine or mechanical nature
Tax statements Design of IT > Valuation services that would have a material
services systems/
controls
effect on the financial statements and involves
a degree of subjectivity
> Performing internal audit services that would
Self-review assume a level of management responsibility
Staff loaned to
threats client or client e.g. designing/performing internal controls
Internal
audit staff joining the
audit firm > Promoting, dealing in, or underwriting an audit
work
client’s shares
Performing > Providing corporate finance advice that interacts
valuations that with the financial statements
in the financial finance > A partner or employee may not be a director or
statements e.g. officer of an audit client
pensions
35
SELF-REVIEW THREATS
Safeguards:
Preparing
accounting > Use separate teams for the audit and non-audit
records and services
financial
Tax statements Design of IT > Perform an independent review of the audit
services systems/ work
controls
> When performing tax return preparation,
management take responsibility for the returns
Self-review > When performing internal audit services an
Staff loaned to
Internal threats client or client employee of the client is responsible for approving
audit staff joining the all internal audit work
work audit firm
> When providing corporate finance work ensure no
management decisions are taken on behalf of the
Performing
valuations that client
statements e.g.
pensions
36
SELF-REVIEW THREATS
Safeguards:
Preparing
accounting Where an employee of the audit firm has been on
records and loan to the client:
financial
Tax statements Design of IT > Perform an additional review of the work
services systems/ performed by the loaned individual
controls
> Do not assign them to audit the work they
performed while on loan
Self-review > Alternatively, do not include them on the audit
Staff loaned to
threats client or client team
Internal
audit staff joining the
audit firm No auditor should audit their own work!
work
Performing
valuations that
statements e.g.
pensions
37
SELF-REVIEW THREATS
Safeguards:
Preparing
accounting Where a member of staff of the client joins the audit
records and firm as an employee:
financial
Tax statements Design of IT > Do not include them on the audit team if they have
services systems/ been an employee of the client during the period
controls covered by the audit report
> Subsequently, perform an independent review of
their work if they are assigned to the audit of their
Self-review Staff loaned to previous employer
Internal threats client or client
audit staff joining the No auditor should audit their own work!
work audit firm
Performing
valuations that
statements e.g.
pensions
38
SELF-REVIEW THREATS
In addition, the following are banned for
Preparing
clients that are PIEs:
accounting
records and > Preparing financial statements
financial
Tax statements Design of IT
> Valuations which are material to the financial
services systems/ statements
controls
> Tax calculations for the purpose of preparing
material accounting entries
Self-review > Internal audit services relating to internal controls,
Staff loaned to
threats client or client financial accounting systems, amounts or
Internal
audit staff joining the disclosures that are material to the financial
audit firm
work statements
> Providing IT systems that are significant to the
Performing
valuations that financial statements
statements e.g.
pensions
39
FAMILIARITY THREATS
Threat Safeguard
Unlisted clients: rotate individuals off the audit team, change their role, and/or perform
an independent quality review
Long association of
Listed clients: Partners must be rotated off after 7 years and have a cooling-off period
senior members of the
as follows:
audit team with the audit
• Engagement partner: 5 years
client
• Engagement Quality Review (EQR) partner: 3 years
• Key audit partner: 2 years
Close family/personal
If the threat relates to an audit team member:
relationships between a
• Do not assign work to the individual that relates to the family member, or
member of the firm and
• Remove the individual from the team
someone at the client
If the threat relates to another employee or partner at the firm:
who can exert influence
• Ensure they cannot influence the audit
over the financial
• Have an appropriate review of the audit work performed
statements
40
FAMILIARITY THREATS
Threat Safeguard
The individual must not be on the audit team if they were an employee during the period
covered by the audit and
Employee of the firm
• Were a director, or
recently worked for an
• Could exert significant influence over the financial statements
audit client
If the above does not apply, apply safeguards appropriate to the level of threat such as a
quality control review
The severity of the threat depends on considerations such as:

• The role taken at the client and likely involvement with the audit
Employee or partner of
• The length of time on the audit team and how senior they were
the firm becomes a
Appropriate safeguards could include:
director or employee of
• Varying the audit plan
an audit client
• Assigning more senior individuals to the audit team
• A review performed on the audit work of the former team member
41
INTIMIDATION THREATS
Situations which could create intimidation threats:

> Threat of dismissal
> Actual or threatened litigation
> Pressure to reduce the audit fee
> Time pressure to complete the audit
> Pressure to reduce the amount of audit work
Safeguards
> Discuss any such threats with those charged with governance (the audit committee)
> Appoint more senior or experienced individuals to the audit team
> Consider resigning if the threat cannot be reduced by safeguards to an acceptably low level
42
ADVOCACY THREATS
An auditor promoting a position or opinion on behalf of a client creates threats to their

objectivity
Ways this may arise include:
> Advocating on behalf of a client in litigation or disputes
> Promoting a client’s share listing
> Negotiating for finance on the client’s behalf
Safeguard
> Decline any offer of work that would be advocating the client
43
MANAGEMENT THREAT
Auditors must not take decisions that should be made by management of their client
because doing so would cause them to lose their objectivity
Examples might include:
> Suggesting an appropriate IT system
> Making recruitment decisions
> Designing, implementing or maintaining internal controls
Safeguards
> Politely decline any work which would constitute taking on a management role for
clients
> If the work is accepted management confirm in writing that they are responsible for
any related management decisions
3. SAFEGUARDS
EVALUATING THE APPROPRIATENESS OF
SAFEGUARDS
When evaluating how to respond to threats, the auditor must consider how serious the threat is
Considerations could include:
> For team members whose objectivity is in question – how senior are they?
> For hospitality offered by the client – what is it’s monetary value? How would a reasonable third party
perceive it?
> When considering the dependence on the client for fees: what would be the impact to the firm overall of
losing the fees?
> If considering whether to accept non-audit work – how material would it be to the financial statements?
46
SAFEGUARDS
As well as the specific safeguards stated in the Code, there are other general safeguards¹ created by the
profession or in the workplace:
THE PROFESSION OR REGULATIONS THE WORKPLACE
> Education, training and > Internal codes of ethical conduct

experience requirements for entry > Regular rotation of staff
into the profession
> Strong internal controls
> Continuing professional
development requirements > Disciplinary procedures
> External monitoring visits > A strong culture of ethical
behaviour
> Disciplinary procedures
¹ACCA Guidance on Ethical Matters for Members in Business

4. RESOLVING ETHICAL
CONFLICTS
48
ETHICAL CONFLICTS
A professional accountant might face a situation in which complying with one fundamental
principle conflicts with complying with one or more other fundamental principles¹
Consultation is likely to be necessary:

> With others within your firm
> With the board of directors or audit committee
> If a significant conflict cannot be resolved the auditor may consider seeking advice from the ACCA or legal
advisors
> If the conflict cannot be resolved it may be necessary to resign from the audit team of the client
¹ ACCA Code of Ethics and Conduct 110.2 A2

49
CONFIDENTIALITY
> External auditors have access to much sensitive and valuable information about their clients
> As a basic rule, members of an audit team should not disclose any information to those outside of the audit
team, even to colleagues in the same firm
> Information should only be disclosed under certain circumstances

50
DISCLOSURE OF CONFIDENTIAL INFORMATION
Mandatory disclosure Voluntary disclosure
> When the auditor knows, or has reason to suspect > To protect against being sued for negligence
that, a client has committed > When required by the courts as part of a legal
‒ Fraud process
‒ Tax evasion > When the auditor believes it to be in the public
‒ Terrorism interest
‒ Drug trafficking
‒ Money laundering
‒ Bribery
51
DISCLOSURE OF CONFIDENTIAL INFORMATION
Whether or not it is in the public interest is a matter of

auditor judgement
> Examples could include poor employee working
conditions or unethical use of customer data
> Legal advice should be sought before making any
disclosure to avoid the risk of being sued
> Matters to consider:
– Is it something that is likely to be repeated?
– How serious is the impact?
This Photo by Unknown Author is licensed under CC BY-ND

52
CONFLICTS OF INTEREST
> Acting as auditor for two clients at the same time where the clients are competitors in
the same industry
> There is a threat of confidential information about one client being leaked to the
other
> There is a threat to the objectivity of the auditor where knowledge about the
competitor may influence the judgements made by the auditor
> Advise both clients of the situation, seek their approval and suggest they seek
independent advice
> Separate engagement leaders for each and separate teams
> Controls to prevent the transfer of client information between teams
> Second partner review
> If adequate safeguards can't be implemented, the auditor should resign
5. PROFESSIONAL
SCEPTICISM
54
PROFESSIONAL SCEPTICISM
The auditor is required to plan and perform the audit with professional scepticism (ISA 200)
Professional scepticism is an attitude that includes a questioning mind, being alert to conditions which may
indicate possible misstatement due to error or fraud, and a critical assessment of evidence¹
Application of professional scepticism increases the auditor’s ability to identify risks of material misstatement
and respond to the risks and also enhances objectivity and independence
¹ IAASB Handbook
55
APPLICATION OF PROFESSIONAL
SCEPTICISM
Scepticism is essential in audit
> When performing risk assessment procedures at the planning stage of
the audit
– Auditors discuss unusual variances in analytical procedures with
management
– Auditors should not simply accept what management tells them
without questioning its plausibility
– Auditors may need to use specialists to help them form their own
view of the explanations
56
APPLICATION OF PROFESSIONAL
SCEPTICISM
> Auditors must challenge management on complex and subjective
accounting matters
> Scepticism is needed when deciding how much reliance can be placed
on evidence from management
> When evaluating evidence being alert to contradictory evidence rather
than simply evidence that supports the assertions in the financial
statements
57
INCREASING IMPORTANCE OF PROFESSIONAL

SCEPTICISM
> It is an issue that is high on the agenda of regulatory authorities such as the FRC and
the IAASB
> Seen as a key factor contributing to audit quality as the application of scepticism
should reduce the risk of giving the wrong audit opinion
> Auditors must be confident to challenge management
Reasons for the increased emphasis on scepticism include among others:

> IFRS requires increased use of judgment and subjectivity when preparing accounts
> Criticism in the wake of corporate and audit failures of auditors for not applying
sufficient professional scepticism in the their audit work
6. PROVISION OF NON-AUDIT
SERVICES TO AUDIT CLIENTS
59
ETHICAL CONSIDERATIONS WHEN PROVIDING

NON-AUDIT SERVICES
> Audit firms are ideally placed to provide other services to their clients such as tax
advice or internal audit services
> These present ethical threats to the audit firm’s independence and professional scepticism,
such as the threat of self-review
> Safeguards such as separate teams can be used to reduce the threat of self-review but
there is still a risk of conscious or sub-conscious bias by the firm
US APPROACH UK APPROACH IESBA APPROACH

> In the US provision of non- > In the UK many non-audit > The IESBA code permits most
audit services to SEC services (including internal non-audit services with
registered audit clients has audit services) are not allowed restrictions on those that can
been banned under SARBOX to be provided to listed audit be provided to listed clients
legislation clients
60
POTENTIAL SCENARIO
Question Answer
> Halston Co, an unlisted company, has been an Matters to consider:
audit client for six years after your firm advised
Familiarity
management on an acquisition of a subsidiary.
> Halston Co has been a client for six years therefore
> Your firm provides Halston Co with technical there may be a familiarity threat if the same partner
advice on financial reporting and tax services. has overseen the audit for this period. The partner
Most recently you have been asked to conduct a may become too trusting and fail to challenge the
valuation on a potential further acquisition. client in the same way they would a new client
> Comment on the ethical and other > The firm should consider appointing an engagement
professional issues raised, and recommend quality reviewer to ensure the audit is being
any actions that should be taken performed with sufficient professional scepticism
61
POTENTIAL SCENARIO
Question Answer
Self-review
> Technical advice on financial reporting, tax services
> Your firm provides Halston Co with technical and due diligence create a self-review threat
advice on financial reporting and tax services.
Most recently you have been asked to conduct a > The auditor will be auditing financial statements that
valuation on a potential further acquisition. have been prepared based on their own advice and
so cannot be objective
> Comment on the ethical and other
> The threat could be significant depending on the type
professional issues raised, and recommend
of advice and materiality of the tax services provided
any actions that should be taken
> However, as Halston Co is not listed, the firm can still
provide these services with as long as safeguards
applied
62
POTENTIAL SCENARIO
Question Answer
Safeguards
> Separate teams must be used for the audit and the
> Your firm provides Halston Co with technical non-audit services
advice on financial reporting and tax services.
Most recently you have been asked to conduct a > Each team must be competent for the service
valuation on a potential further acquisition. specialism provided
> Comment on the ethical and other

63
POTENTIAL SCENARIO
Question Answer
> Halston Co has been an audit client for six years Matters to consider:
after your firm advised management on an
Management threat
acquisition of a subsidiary.
The provision of advice may be seen to be acting in the
> Your firm provides Halston Co with technical capacity of management if the advice provided is acted
advice on financial reporting and tax services. on without approval by Halston management
Most recently you have been asked to conduct a
valuation on a potential further acquisition. You firm should not take on management
responsibilities, for example for the preparation of the
> Comment on the ethical and other financial statements
THANK YOU
Questions: info@vivatuition.com

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B1. Code of Ethics AAA

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CODE OF ETHICS

Advanced Audit and Assurance

FUNDAMENTAL ETHICAL PRINCIPLES¹

CONFIDENTIALITY PROFESSIONAL BEHAVIOUR

¹ACCA Code of Ethics and Conduct

THE ACCA CONCEPTUAL FRAMEWORK APPROACH

> The approach taken in the framework is set out below

CATEGORISE THE THREAT IMPLEMENT SAFEGUARDS

CATEGORIES OF THREATS - RECAP

Overdue > A financial or other interest that will inappropriately

Referral fees Contingent

EXAMPLES OF SELF-INTEREST THREATS

EXAMPLES OF SELF-INTEREST THREATS

Referral fees Contingent

EXAMPLES OF SELF-INTEREST THREATS

A ‘Public Interest Entity’ or PIE is:

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EXAMPLES OF SELF-INTEREST THREATS

Close Owning > The auditor and client have an inappropriately

Overdue > The auditor stands to benefit if the client is

EXAMPLES OF SELF-INTEREST THREATS

Referral fees Contingent

Referral fees Contingent

Referral fees Contingent

Referral fees Contingent

Referral fees Contingent

Referral fees Contingent

A threat arises when

Referral fees Contingent

Referral fees Contingent

Referral fees Contingent

Referral fees Contingent

The severity of the threat depends on considerations such as:

Situations which could create intimidation threats:

An auditor promoting a position or opinion on behalf of a client creates threats to their

THE PROFESSION OR REGULATIONS THE WORKPLACE

> Education, training and > Internal codes of ethical conduct

¹ACCA Guidance on Ethical Matters for Members in Business

Consultation is likely to be necessary:

¹ ACCA Code of Ethics and Conduct 110.2 A2

> Information should only be disclosed under certain circumstances

DISCLOSURE OF CONFIDENTIAL INFORMATION

Mandatory disclosure Voluntary disclosure

DISCLOSURE OF CONFIDENTIAL INFORMATION

Whether or not it is in the public interest is a matter of

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INCREASING IMPORTANCE OF PROFESSIONAL

Reasons for the increased emphasis on scepticism include among others:

ETHICAL CONSIDERATIONS WHEN PROVIDING

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> Comment on the ethical and other

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