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CODE OF ETHICS. Cases & Issues of Unjustified Removal of Auditors: Independence of Auditors. Unjustified Removal of Auditors. Section 224 – Appointment & Remuneration of Auditor

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Code of ethics
CODE OF ETHICS

Cases & Issues of Unjustified

Removal of Auditors:

  • Independence of Auditors


Unjustified removal of auditors
Unjustified Removal of Auditors

  • Section 224 – Appointment & Remuneration of Auditor

  • Section 224A – Auditor not to appointed except with the approval of the company by special resolution in certain cases.

  • Section 225 – Provisions as to resolutions for appointing or removing auditors

  • Clause (8)&(9) Part I of Schedule I of CA Act,1949


Relationship with other members in practice
Relationship with Other Members in Practice

  • Communication with outgoing Auditor in case of change of auditor

  • Compliance with the requirement of section 224, 224A & 225 of the Companies Act, 1956


Communication with outgoing auditor in case of change of auditor
Communication with outgoing Auditor in case of change of auditor

  • Non-compliance of the Provisions of Section 224, 224A & 225 of the Companies act, 1956

  • Undercutting of Fees

  • Non-payment of undisputed audit fees

  • Issuance of a qualified report


Compliance with the requirement of sec 224 224a 225 of the companies act
Compliance with the requirement of Sec. 224, 224A & 225 of the Companies Act

  • To ensure that the outgoing is properly removed

  • That the guidelines prescribed by the Institute have been complied with

  • To ensure that the incoming auditor is properly appointed.


Independence

INDEPENDENCE the Companies Act

Independence of Mind

Independence in Appearance


Independence should be exhibited in
Independence Should be Exhibited in the Companies Act

  • Objectivity

  • Integrity

  • Professional Services


Threats of independence
Threats of Independence the Companies Act

  • Self - Interest Threat

  • Advocacy Threat

  • Familiarity Threat

  • Intimidation Threat

  • Self Review Threat


Safeguards
Safeguards the Companies Act

  • Safeguards Created by the Profession, Legislation or Regulation

  • Safeguards within the Assurance Client

  • Safeguards within the Firm/s own Systems & Procedures


Safeguards created by the profession legislation or regulation
Safeguards Created by the Profession, Legislation or Regulation

  • Education, Training & Experience

  • Continuing Education Requirements

  • Professional Standards & Disciplinary Processes.

  • External Review of Firms Quality Control System.

  • Legislation Governing Independence


Safeguards within the assurance client
Safeguards within the Assurance Client Regulation

  • Competent Employees to make Managerial Decisions.

  • Policies and Procedures for fair Financial Reporting.

  • Internal Procedures

  • Corporate Governance Structure


Safeguards within the firms own systems procedures
Safeguards within the Firms own Systems & Procedures Regulation

  • Firm Leadership

  • Policies & Procedures for Quality Control

  • Documented Independence regarding Identification of threats and Application of Safeguards.

  • Disciplinary Mechanism


Objective structure
Objective & Structure Regulation

  • Identifying Threats to Independence

  • Evaluating the Threats

  • Applying appropriate Safeguards to eliminate or reduce the threats.


Public interest public consists of

Clients Regulation

Credit Granters

Government

Employers

Employees

Investors

Business

Financial Community

Public InterestPublic Consists of


Objectives
Objectives Regulation

  • Credibility

  • Professionalism

  • Quality of Services

  • Confidence


Fundamental principles
Fundamental Principles Regulation

  • Integrity

  • Objectivity

  • Professional Competence and Due Care

  • Confidentiality

  • Professional Behavior

  • Technical Standards.


THANKING YOU Regulation

Dr. Alok Ray

Dy. Secretary/

Secretary, Committee on Ethical Standards & Unjustified Removal of Auditors

ICAI


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