Code of ethics
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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

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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

Independence of Mind

Independence in Appearance


Independence should be exhibited in

Independence Should be Exhibited in

  • Objectivity

  • Integrity

  • Professional Services


Threats of independence

Threats of Independence

  • Self - Interest Threat

  • Advocacy Threat

  • Familiarity Threat

  • Intimidation Threat

  • Self Review Threat


Safeguards

Safeguards

  • 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

  • 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

  • Firm Leadership

  • Policies & Procedures for Quality Control

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

  • Disciplinary Mechanism


Objective structure

Objective & Structure

  • Identifying Threats to Independence

  • Evaluating the Threats

  • Applying appropriate Safeguards to eliminate or reduce the threats.


Public interest public consists of

Clients

Credit Granters

Government

Employers

Employees

Investors

Business

Financial Community

Public InterestPublic Consists of


Objectives

Objectives

  • Credibility

  • Professionalism

  • Quality of Services

  • Confidence


Fundamental principles

Fundamental Principles

  • Integrity

  • Objectivity

  • Professional Competence and Due Care

  • Confidentiality

  • Professional Behavior

  • Technical Standards.


Code of ethics

THANKING YOU

Dr. Alok Ray

Dy. Secretary/

Secretary, Committee on Ethical Standards & Unjustified Removal of Auditors

ICAI


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