Exam 4: Professional Ethics and Auditor Responsibilities

The ICAO Rules of Professional Conduct allow advertising that praises the PA as long as the praise is based on verifiable facts.

What is the meaning of the rule of professional conduct that requires an auditor to be objective?

As self-regulating bodies, professional institutes have a duty to investigate all written complaints received about their members as well students accepted into their programs.

Competence and due care can best be described as:

Canada Customs and Revenue Agency has requested the taxes payable working papers of ABC Co.from CA.CA should

What is a key characteristic of critical thinking?

The duty of confidentiality requires a member to do what?

The codified "Rules of Professional Conduct" derives its authority from the CICA Handbook.

Briefly describe the process followed by the ICAO when investigating and charging a member with violating one of the rules of professional conduct?

The ICAO Rules of Professional Conduct prohibit CAs from accepting commissions for recommending products or services to clients under any and all circumstances.

An ethical dilemma is one in which the choice of alternative actions affects the well being of other persons.

A PA in a large firm has been asked to take over the audit of a client in the pharmaceutical industry from another PA who quit abruptly.The PA is unfamiliar with the pharmaceutical industry.The PA should trust that the work was properly planned by the previous PA and should follow that plan carefully.

Ben Big is a partner in the Burnaby office of the national accounting firm of Price Brickhouse.He owns 1,000 shares of common stock in Public, Inc., an audit client of the firm.This amount is not material to his personal investments.The Public, Inc.audit is performed by the Toronto office.Ben Big has not informed the firm that he owns the shares.Required: The situation above may involve a violation of one of the rules of professional conduct of the ICAO.State the rule in question and explain why or why not there is a violation of the rule.You need not refer to the rule number but should clearly describe the rule in question.

For each of the following cases indicate whether or not the action by the CA, a member in good standing of the ICAO, is a violation of the ICAO "Rules of Professional Conduct".In all cases, cite the rule(s) that apply. a.On an engagement, CA observed all of the quality control guidelines required by the firm.b.CA refused to disclose information demanded by a court of law about a client because of "client-accountant privilege". c.CA took out a conventional, new home mortgage with a financial institution that is a client.d.CA quoted a fee that was based on whether the CA's report on the client's financial statements resulted in the approval of a bank loan. e.CA disclosed a lack of independence in the audit report.f.CA acted as a trustee for a client's profit-sharing trust. g.CA accepted fees from local lawyers referring clients to them. h.CA performed the audit in accordance with generally accepted auditing standards. i.CA advised a client to invest in a tax shelter, in which CA has an undisclosed interest.j.CA bought several spots on the local TV station to promote the firm's tax services.

A complaint has been made against a member for an audit failure.If this complaint is found to have merit, under which ICAO Rule of Professional Conduct is the member likely to be charged?

The fundamental principles of accepted conduct are only general guidelines, therefore they are not as important as the specific rules.

The "Rules of Professional Conduct" for professional accountants apply to services performed by members in both public and private practice.

In the course of performing an audit, an auditor begins dating the CFO of the auditee.What kind of threat to independence might arise?

Explain how the ICAO enforces the "fundamental statements of accepted conduct" and the "Rules of Professional Conduct".

Wally Wide is the partner on the audit engagement of First National Bank for its fiscal year-end of January 31.Wally was recently promoted to partner.Based on his increase in income, Wally and his family bought a larger home.First National Bank had the most competitive mortgage rate so Wally obtained his mortgage loan from First National. Wally paid 20% down and received no special rate of interest.Required: The situation above may involve a violation of one of the rules of professional conduct of the ICAO.State the rule in question and explain why or why not there is a violation of the rule.You need not refer to the rule number but should clearly describe the rule in question.