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In the given case study, what type of report does the bank request from 'Me and You Private Limited' company?
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A contribution report from a chartered accountant.
What is the key difference between 'Independence of Mind' and 'Independence of Appearance'?
'Independence of Mind' refers to the auditor's internal mental state of being impartial, while 'Independence of Appearance' refers to how external parties perceive the auditor's independence.
Why is 'Professional Competence and Due Care' important for auditors?
It is essential for maintaining professional knowledge and skills, and ensuring the timely execution of work.
Under what circumstances can auditors share client information with external parties?
Confidentiality can only be violated by law or with the client's permission.
Describe a situation that could cause an auditor to lose their Independence of Mind.
An auditor might lose their Independence of Mind if they are unduly influenced by the client's management or other stakeholders.
What should auditors avoid to ensure they remain objective in their professional judgments?
Auditors should avoid bias, conflicts of interest, or undue influence of others.
What principle requires auditors to avoid any bias during the performance of their duties?
Objectivity
What is the role of Integrity in auditing?
It ensures that auditors do not associate with false information and behave honestly.
Define 'Independence of Mind' in the context of auditing.
Independence of Mind is the mental state that allows auditors to present their perspective and make decisions without any pressure.
What could be a consequence of failing to maintain Professional Competence and Due Care?
It could lead to substandard auditing work and potential legal or professional repercussions.
List two different aspects of Independence in auditing.
Independence of Mind and Independence of Appearance.
What risk does violating the principle of Professional Behavior pose to an auditor's career?
Engaging in activities that discredit the profession can harm the auditor's reputation and credibility.
Why is it important for auditors to maintain Independence of Appearance?
It helps maintain external trust and credibility, ensuring that the auditor's professional reputation is not harmed.
What ethical principle requires auditors to be straightforward and honest in all professional and business relationships?
Integrity
How does the principle of Confidentiality protect clients?
It ensures that client information is not shared with external parties without the client's permission or unless legally required.
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