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Audit Code of Professional Ethics Overview

This document provides an overview of auditing and the code of professional ethics. It defines auditing as enabling an auditor to express an opinion on whether financial statements are prepared in accordance with the identified financial reporting framework. There are three main types of audits: financial statement, operational, and compliance. Auditors can be external, internal, or government auditors. The five fundamental principles of professional ethics are integrity, objectivity, confidentiality, professional competence and due care, and professional behavior. Threats to compliance with these principles include self-interest, self-review, advocacy, familiarity, and intimidation.

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Cherrie Arianne Fhaye Naraja
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44 views

Audit Code of Professional Ethics Overview

This document provides an overview of auditing and the code of professional ethics. It defines auditing as enabling an auditor to express an opinion on whether financial statements are prepared in accordance with the identified financial reporting framework. There are three main types of audits: financial statement, operational, and compliance. Auditors can be external, internal, or government auditors. The five fundamental principles of professional ethics are integrity, objectivity, confidentiality, professional competence and due care, and professional behavior. Threats to compliance with these principles include self-interest, self-review, advocacy, familiarity, and intimidation.

Uploaded by

Cherrie Arianne Fhaye Naraja
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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AUDIT & CODE OF

PROFESSIONAL
ETHICS OVERVIEW
Presented by: De Guzman, Franz Louisa O.
Table of contents
01 02 03
Auditing Define Types of Audits Types of Auditors

04 05
Fundamental Principles Threats to Compliance with
of Professional Ethics the Fundamental Principles
01
Auditing
Define
What words
immediately comes to
mind when we say
auditing?
What is
Auditing?
Philippine standards on auditing:

- defines auditing by stating the objective of a


financial statement audit, which is to enable the
auditor to express an opinion whether the financial
statements are prepared, in all material respects,
in accordance with an identified financial reporting
framework.
Four Types of
Audit Opinion
Unmodified 01 02 Qualified
Opinion Opinion

Disclaimer 04 03 Adverse
Opinion Opinion
02
Types of
Audits
1 2 3
Financial Operational Compliance
statement audit audit audit
Financial Statement
Audit
 This is an audit conducted to
determine whether the financial
statements of an entity are
fairly presented in accordance
with an identified financial
reporting framework.
Operational
Audit
 An operational audit is a study of
a specific unit of an
organization for the purpose of
measuring its performance.
 This type of audit is also known
as performance audit or
management audit.
Compliance
Audit
 Compliance audit involves a
review of an organization's
procedures to determine whether
the organization has adhered to
specific procedures, rules or
regulations.
03
Types of
Auditors
1 2 3
External Internal Government
auditors auditors auditors
External auditors

 These are independent CPA’s who


offered their professional services to
different clients on a contractual basis.
External auditors are the ones who
generally perform financial statement
audits.
Internal auditors

 Internal auditors are entities own employees


who investigate and appraise the
effectiveness and efficiency of operations and
internal controls. The main function of
internal auditors is to assist the members of
the organization in the effective discharge
of their responsibilities. Internal auditors
usually perform operational audits
Government auditors

 These are government employees whose


main concern is to determine whether
persons or entities comply with
government laws and regulations.
Government auditors usually conduct
compliance audits.
04
Fundamental
Principles of
Professional
Ethics
Fundamental Principles of Professional
Ethics
Integrity Objectivity Confidentiality
01 02 03

Professional Professional
Competence & Due Care Behavior

04 05
Integrity
 A professional accountant should be
straightforward and honest in
professional and business
relationships.
 Integrity implies not merely honesty,
but it requires being brave enough
to fight for what you believe in.
Objectivity
 The principle of objectivity imposes
the obligation on all professional
accountants to be fair, intellectually
honest, and free of conflicts of
interests.
 A professional accountant should be
fair and should not allow prejudice
or bias, conflict of interests or
influence of others to override
objectivity.
Confidentiality
 A professional accountant should
respect the confidentiality of
information acquired during
performing professional services
and should not use or disclose any
such information without proper
and specific authority or unless
there is a legal our professional
right or duty to disclose.
Professional Competence
and Due Care

 A professional accountant should


not undertake any engagement or
accept an employment which he or
she cannot reasonably expect to
discharge with professional
competence.
Professional Competence
and Due Care

 Due care encompasses all the


responsibilities to perform
professional services in
accordance with technical and
professional standards, carefully,
thoroughly and on a timely basis.
Professional
Behavior
 A professional accountant should
comply with relevant laws and
regulations and refrain from any
conduct which might bring discredit
to the profession.
05
Threats to
Compliance with
the Fundamental
Principles
Fundamental Principles of Professional
Ethics
Self-Interest Self-Review Advocacy
01 02 03

Familiarity Intimidation
04 05
Self- interest Threat

 The threat that a financial or other


interests will inappropriately
influence the professional
accountant’s judgment or behavior
Self-review Threats

 The threat that a professional


accountant will not objectively
evaluate the results of the previous
judgment made or service
performed in forming a conclusion
about the subject matter of the
engagement.
EXAMPLES:
EXAMPLES:
Advocacy
Threat
 The threat that a professional
accountant will promote a client’s
or employer’s position to the point
that the professional accountant’s
objectivity is compromised.
Familiarity Threat

 The threat that due to a long or close


relationship with a client or
employer, a professional accountant
will be too sympathetic to their
interests or too accepting of their
work.
Intimidation Threat

 The threat that a professional


accountant will be deterred from
acting objectively because of
actual or perceived pressures
including attempts to exercise undue
influence over the professional
accountant.
Thank you!!
CREDITS: This presentation template was created by
Slidesgo, including icons by Flaticon, infographics &
images by Freepik

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