Question

How do the four principles of the Code of Ethics (Integrity, Objectivity, Confidentiality, and Competency) influence the auditing standards?   Why are each of these important?   Are these principles sufficient?

Answer 1

Ethical requirements .

INTEGRITY AND OBJECTIVITY

He should be straight forward and sincere in his approach to the professional work .he should be fair without any bias or prejudice.

INDEPENDENCE

The term independence means that the judgement of a person is not subordinate to the wishes and directions of the other persons who have engaged him.the audit desicions ahould be taken without giving importance to his personal wishes .

CONFIDENTIALITY

The auditor should not disclose the information collected by him during the course of his professional work,to any third party without specific authority from the client or there is a legal duty to disclose

PROFESSIONAL COMPETENCY AND DUE CARE

The auditor requires specialised skill and competence which are acquired through combination of general education, technical knowledge obtained through study and practical experience.

PROFESSIONAL BEHAVIOUR

Auditor supposed to maintain professional behaviour.

These are the main code of the ethics to be followed by the auditor.and there are othe imporatant ethical and professional requirements.

Professional skepticism

The auditor shall plan and perform an audit with professional skepticism recognising the circumstances may exist taht cause the financial statements to be materially miststaed.

Professional judgement

The auditor shall excise the professional judgement in planning and performing of audit .

Audit evidence and audit risk  

To obtaino resonable assurance ,the auditor shall obtain sufficient approprate audit evidence to reduce the audit risk to an acceptably low level and there by enable the auditor to draw reasonable conclusion s on which to base the auditors opnion .