Syllabus B. Professional and Ethical Considerations B1. Code of Ethics for Professional Accountants

B1c. Safeguards 5 / 9

Syllabus B1c)

Discuss and evaluate the effectiveness of available safeguards.

Safeguarding independence is the responsibility of the audit firm & the profession

Audit Firm Level

A culture of independence should be created, this means a rotation of the engagement partner and senior staff. 

In addition, an audit firm should have the following procedures in place:

  • Training

    To an appropriate level for the role

  • Quality control procedures

    This ensures that independence is considered in  all work performed by the audit firm.

  • Consultation

    So issues can be discussed internally and procedures are laid out to facilitate this

  • Ethical Codes

    of conduct

  • Internal Controls

The Profession

The profession should take disciplinary action as appropriate. 

The profession regularly suggest new practices and procedures designed to improve auditor independence.

So things that the profession do to help safeguard against ethical threats are:

  1. Regular rotation of auditors made compulsory

  2. Using audit committees

  3. ACCA Exams and CPD :)

  4. Corporate Governance and of course auditing standards

The Individual

An individual auditor can limit ethical threats by..

  • Complying with CPD regulations - and staying up to date

  • Keeping in contactwith fellow professionals

    To informally discuss issues and problems

  • Independent Mentor used to discuss individual threats