M1 Professional Ethics

Question 1

If a CA makes exaggerated claims, dishonest claims, or says he is better than someone else is he allowed to do that?

Answer 1

No, according to s115 of the SAICA CPC, a professional accountant shall not bring the profession into disrepute and they shall not make exaggerated claims and make disparaging or unsubstantiated claims to the work of others

Question 2

what are the fundamental principles of the SAICA CPC

Answer 2

• Integrity
• Objectivity
• Professional competence and Due care
• Confidentiality
• Professional Behavior

Question 3

What are the possible threats to the fundamental principles

Answer 3

• Self-interest threat
• self-review threat
• Advocacy threat
• Familiarity threat
• Intimidation threat

Question 4

what are the sections and section names that apply to Professional business Accountants

Answer 4

Section 200 - applying the Conceptual framework of the Code
Section 210 - deals with conflicts of interest
Section 220 - Preparation and Presentation of Financial Statements or information
Section 230 - Acting with sufficient Expertise
Section 240 - Financial Interests, compensation and incentives linked to financial reporting and decision making
Section 250 - Inducements, including gifts and hospitality
Section 260 - Non-compliance with laws and regulations
Section 270 - Pressure to breach the fundamental principles

Question 5

How do you know what the principles are under each section in the SAICA CPC

Answer 5

They will have the reference written in bold

Question 6

What are the sections and section names that apply to Public Practice Accountants

Answer 6

Section 300 - applying the Conceptual framework of the Code
Section 310 - deals with conflicts of interest
Section 320 - Professional appointments
Section 321 - Second opinions
Section 330 - Fees and other types of remuneration
Section 340 - Inducements, including gifts and hospitality
Section 350 - Custody of Client Assets
Section 360 - Responding to Non-compliance with laws and regulations

Question 7

What sections are applicable to Public practice accountants in AUDIT?

Answer 7

All the 300s sections

Section 410 - Fees
Section 411 - Compensation and evaluation Policies
Section 420 - Gifts and hospitality
Section 430 - Actual or threatened litigation

Section 510 - Financial interests
Section 511 - Loans and Guarantees
Section 520 - Business relationships
Section 521 - Family and Personal relationships
section 522 - Recent service with an audit client
Section 523 - Serving as a director or an officer of an audit Client
Section 524 - Employment with an Audit Client
Section 525 - Temporary personal assignments
Section 540 - Long Association of Personnel with an Audit Client

Section 600 - Provision of non-assurance services to an audit Client
Section 601 - accounting and bookkeeping services
section 602 - Administrative services
Section 603 - valuation services
section 604 - Tax services
section 605 - Internal Audit services
Section 606 - Information technology system services
section 607 - litigation support services
section 608 - legal services
section 609 - Recruiting services
section 610 - Corporate finance services

Question 8

What happens if someone breaches the SAICA CPC? If anything?

Answer 8

They would have breached the by laws of SAICA and will be subject to a disciplinary process by them but only if they are a CA and registered as a chartered Accountant it trainee with them?

Question 9

What is IRBA’s Disciplinary process?

Answer 9

Step 1: Someone would have filed an allegation of improper conduct with SAICA
Step 2: check if there is any substance to the claim and if a RA is involved, stop process if there isn’t
Step 3: Conduct an investigation
Step 4: report findings to the disciplinary advisory committee
Step 5: consider recommendation and prepare notification and charge sheet for referral to the board
Step 6: Perform a hearing on merits by disciplinary committee
Step 7: If decided guilty, charge a sentence

Word: CCRCPI

Question 10

When answering a question about concerns regarding someone’s actions and the SAICA CPC, how should you answer it?

Answer 10

0. look through the SAICA COPC at the bold references to find relevant principles
1. state the section that applies to the situation (not from the 100s)
2. State how that section is being breached
3. State the section from the 100s or merely just the threat to which fundamental principle
4. explain all the reasons on how or what he is doing has caused this
5. is the threat significant?
6. explain any safeguards that can be taken
7. Repeat for different sections or principles

Question 11

What is the basic idea of ethics?

Answer 11

That the actions that you do, must be good for you but also good for others