CPA Code of Professional Conduct: Independence, Rules of

School: Queens University - Course: BUSINESS MANAGEMENT- Subject: Accounting

CPA Code of Professional Conduct + Audit Report Hadi Ahmad

Agenda  Independence  Rules of Professional Conduct  Audit Opinion  Going Concern

Independence Independence is the ability to act with integrity and objectivity Lack of auditor independence impacts on credibility and reliability of the financial statements The auditor must be, and be seen to be, independent

Auditor Independen ce Independence in fact • ability to act independently with integrity, objectivity, and professional scepticism • ability to make a decision free from bias, personal beliefs, and client pressures Independence in appearance • belief that independence of mind has been achieved

Threats to independence Self-interestSelf-reviewAdvocacy FamiliarityIntimidation

Self- interes t threat Examples: Bank account held with the clientShares owned in the clientA loan to or from the clientFee dependence, where the fees from a client form a significant proportion of all fees of the firm Close business relationship with the client Can occur if the audit firm or its staff have financial interest in audit client

Self- review threat Examples: Assurance team member has recently been an employee or director of the clientPreparing information for the client that is then assured Performing services for the client that are then assured