Ethical Standards : A Framework For Auditor Independence

1978 Words Mar 31st, 2015 8 Pages
Introduction
Auditing standards in UK and Ireland, including Ethical Standards, International Standards on Auditing and International Standard on Quality Control, are enacted for audits of financial statements. The content of these standards includes objectives for the auditor, requirements and application and other explanatory material.
Ethical Standards
Ethical standards, issued by the Auditing Practices Board (APB), is a framework for auditor independence. The objective of Ethical standards is to assure the auditors remain independent during the auditing process. It provides a series of basic principles and essential procedures to constrain the auditor’s behavior. It mandates the auditor to comply with the rules when conducting audit engagements. Ethical standards identified potential threats to objectivity, independence analysis and provided safeguards and procedures to mitigate the impact of these threats. (Frc.org.uk, 2015) The first standard is about the basic principles and procedures relating to auditor independence that must be applied when conducting audit engagements. Ethical Standards 2 - 5 concern how these principles apply to particular relationships, normal services and non-audit services with the client. Ethical standards ensure the independence of auditors by prohibiting auditors from the circumstance that is not allowed or acceptable by the application of safeguards and some specific situations that are only acceptable with application of safeguards.…

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