Question

QUESTION 6: For each of the following situations, state the fundamental ethical principle involved (from those listed in SECTION 100 of APES 110).

Situation 1: When tendering for an audit, an auditor made exaggerated claimsconcerning her length of time in the profession.

Situation 2: During the course of an audit of a listed mining company, the audit senior learned about some exciting new discoveries the client had made. He then advised his brother to purchase shares in the company.

Situation 3: An auditor, with no experience in the wine industry, tendered for an audit of a wine company.

Answer 1

Situations and fundamental ethical principle involved (with explanations)-

Serial	Situations	Fundamental ethical principle involved	Explanation of the fundamental ethical principle being affected by situations
Situation 1	When tendering for an audit, an auditor made exaggerated claims concerning her length of time in the profession.	Professional Behaviour	In marketing and promoting themselves and their work, Members shall not bring the profession into disrepute. Members shall be honest and truthful and not: (a) Make exaggerated claims for the services they are able to offer, the qualifications they possess, or experience they have gained(Section 150.2-a)
Situation 2	During the course of an audit of a listed mining company, the audit senior learned about some exciting new discoveries the client had made. He then advised his brother to purchase shares in the company.	Confidentiality	An auditor should not use confidential information acquired as a result of professional and business relationships to their personal advantage or the advantage of third parties. (Section 140.1-b)
Situation 3	An auditor, with no experience in the wine industry, tendered for an audit of a wine company.	Professional Competence and Due Care	To maintain (have) professional knowledge and skill at the level required to ensure that clients or employers receive competent Professional Service (Section 130.1-a)

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