Module 11

Question 1

What is the ICAS Code of Ethics?

Answer 1

based on International Ethics Standards board for accountants 
Principles:
COPIP
Confidentiality 
Objectivity 
Professional competence and due care
Integrity
Professional behaviour

Question 2

What are the six categories of threat that might affect independence?

Answer 2

MASSIF
Management 
Advocacy 
Self-review
Self-Interest 
Intimidation
Familiarity

Question 3

What are auditors of listed r public interest companies requires to provide the audit committee with?

Answer 3

• disclosure of relationships that may impact independence
• details of non-audit services
• confirmation that covered people are independent
• inconsistencies
• discussion

Question 4

What are the prohibited non-audit services by the ethical standards?

Answer 4

year and year following of audit

• tax services
• services created to management
• bookkeping and accounts preparation
• payroll servies
• valuation services
• related to internal audit

Question 5

Requirements of the SOX Act?

Answer 5

• Prohibition of non-audit services
• Pre-approval of services by the audit committee
• Audit partner rotation - five years

Question 6

When can a former partner join a client according to the ethical standards ?

Answer 6

two years

Question 7

When should an audit patenter be rotated according to the ES?

Answer 7

After ten years or and additional partner should be involved to review
For public interest and listed audits:
-rotated after five years (must not return for five)
-the engagement quality control reviewer rotated after seven (must not return for five)
-any other key partners after seven (must not return for two)

Question 8

What is the safeguard for preventing an auditor being dependent on non-audit services from a client?

Answer 8

A public interest non-audit fees must be capped at 70% of the total fees of the last three years paid by the client