Relevant ethical requirements
The fundamental ethical principles that apply to all services that professional accountants in public practice provide are: integrity, objectivity, professional competence and due care, confidentiality, professional behavior, and technical standards. Equally, the International Standard on Quality Control 1 (ISQC1) will apply to all audit and assurance and related services that the practitioner provides. Independence requirements should be considered for non-audit assurance services by ISQC1 (paras 21-25). Judgment must be applied as to whether any management responsibilities that formed a part of non-assurance services provided have a bearing on the subject matter for the assurance engagement. For example, where a firm provides internal audit services and is asked for an assurance report on a system/process/controls. Before accepting any professional engagement, the practitioner considers whether any ethical factors should lead the practitioner to decline the appointment. Chartered accountants are subject to ethical and other guidelines laid down by the ICAEW, including the Fundamental Principles of the Code of Ethics, as set out in Part A Section 100 Introduction and Fundamental Principles in performing any professional services.
ICAEW’s Code of Ethics is consistent with the Code of Ethics for Professional Accountants issued by the IESBA. When performing assurance engagements other than audits and reviews, the practitioner must consider applicable independence requirements in Part B Section 291, Independence – Other Assurance Engagements. Part B Section 291 is based on a conceptual approach that considers threats to independence, accepted safeguards, and the public interest. Under this approach, firms and members of assurance teams must identify and evaluate circumstances and relationships that create threats to independence and, where necessary, take appropriate action to eliminate these threats or reduce them to an acceptable level by applying safeguards. In particular, appropriate consideration should also be given to the independence of mind and appearance of the responsible party and the user. For example, assisting a responsible party in preparing its report may result in a self-review threat if the impact of the assistance on the matter being reported on is subjective and material. If the practitioner identifies threats that are not insignificant, appropriate safeguards need to be considered and implemented. The use of independent teams where appropriate. An independent review of the key judgments on the engagement. Where the practitioner concludes that no safeguards would reduce the threat to independence to an insignificant level, the practitioner declines to accept the engagement[Assurance Process | ICAEW]. Example: Top Position LLC is a digital marketing company that advises other businesses to position their products, brands, and institutional image within the virtual environment. The company was founded by Robert Johnson, a marketing expert with vast experience working with Fortune 500 companies. Robert has struggled with a vague corporate culture established within his company due to the lack of ethical standards. He didn’t have time to think about that at the beginning, and now that the company is large, it is difficult to implement them. He hired a consultant to help him along the process, and together they defined four core values: transparency, punctuality, excellence, and honesty. These principles helped the business to increase the healthiness of the work environment and reduced the number of conflicts experienced with customers and suppliers[My Accounting Course].
What are Ethical Standards? - Definition | Meaning | Example. My Accounting Course. Retrieved from:https://www.myaccountingcourse.com/accounting-dictionary/ethical-standards
Ethical requirements in assurance engagements. Assurance Process | ICAEW. Retrieved from: https://www.icaew.com/technical/audit-and-assurance/assurance/process/scoping/assurance-decision/ethical-requirements-in-assurance-engagements