Includes: Compliance with Relevant Ethical Requirements
Compliance with Relevant Ethical Requirements
A1
The auditor, assurance practitioner, engagement quality control reviewer, and firm are to have regard to the applicable requirements of APES 110 Code of Ethics for Professional Accountants (including Independence Standards), issued by the Accounting Professional & Ethical Standards Board Limited in November 2018, which are to be taken into account in determining whether relevant ethical requirements referred to in paragraph 6 of this Auditing Standard have been met. In relation to audits and reviews undertaken in accordance with the Corporations Act 2001, the provisions of Division 3 Part 2M.4 of the Act may also apply.
A2
APES 110 establishes the fundamental principles of ethics which are:
- Integrity;
- Objectivity;
- Professional competence and due care;
- Confidentiality; and
- Professional behaviour.
The fundamental principles of ethics establish the standard of behaviour expected of the auditor, assurance practitioner, engagement quality control reviewer, and firm, when performing audits, reviews and other assurance engagements.
A3
APES 110 provides a conceptual framework to apply in order to identify, evaluate and address threats to compliance with the fundamental principles.
A4
APES 110 specifies Independence Standards, which set out requirements and application material on how to apply the conceptual framework to maintain independence when performing audits, reviews or other assurance engagements. The auditor, assurance practitioner, engagement quality control reviewer, and firm are required to comply with these standards in order to be independent when conducting such engagements. The conceptual framework to identify, evaluate and address threats to compliance with the fundamental principles applies in the same way to compliance with independence requirements.
A5
APES 110 describes independence as comprising both independence of mind and independence in appearance. Independence safeguards the ability to form an assurance conclusion without being affected by influences that might compromise that conclusion. Independence allows the ability to act with integrity, to be objective and to maintain an attitude of professional scepticism.
A6
The fundamental principles in APES 110 are reinforced in particular by:
- The leadership of the firm;
- Education and training;
- Monitoring; and
- A process for dealing with breaches.
A7
The definition of terms in APES 110 may differ from the definitions of those terms in Australian Auditing Standards including terms defined in ASQC 1, ASA 200 and ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information.
In complying with the requirements of this Auditing Standard, the definitions used in APES 110 apply in so far as is necessary to interpret the ethical requirements of ASQC 1, ASA 200 and ASA 220.
Understand the codes of ethics and professional standards that set our expectations of professional conduct and behaviour In Brief
APES 110 - Role and Mindset changes
APESB has made changes to APES 110 (applicable to all members except members in NZ) to reflect the role and mindset expected of members.
Find out more
NZ Code of Ethics - Role and Mindset changes
The NZ Regulatory Board has made changes to the NZ Code of Ethics to reflect the role and mindset expected of members.
Find out more
Standards of ethical conduct
Members in Australia are expected to observe the Australian Professional and Ethical Standards Board (APES) 110 – Code of Ethics for Accounting Professionals.
Member conduct in New Zealand is similarly governed by the NZICA Codes of Ethics.
These standards are used to assess a member’s professional conduct in the event of a complaint by a client or third party.
A failure to meet the standard may result in disciplinary proceedings. Therefore, there is a significant duty imposed on members to ensure they comply with these standards.
The fundamental principles in both codes are:
- Integrity: Honesty and straightforwardness in professional and business relationships
- Objectivity: Avoid the impact of biases on your judgement, decision making or allow undue influence on others or yourself.
- Professional competence and due care: Maintain professional knowledge and skill at the standard expected by a member of the public when seeking professional advice, or the standard of work and output by an employer. This includes keeping up to date with current trends and technical standards
- Confidentiality: Respect the right of your clients and employer to have personal details and information kept secure, private and confidential.
- Professional behaviour: Compliance with laws and regulations relevant to where you live and do not behave in a way that reflects badly on you, your business or employer and the profession
Both codes mirror the standard expected of an accounting professional in:
Public Practice
- Professional appointments
- Conflict of interest
- Second opinions
- Fees and other remuneration
- Marketing professional services
- Inducements including gifts and hospitality
- Custody of client’s assets
- Responding to non-compliance with laws and regulations
Business
- Conflicts of interest
- Preparation and presentation of information
- Acting with sufficient expertise
- Financial interests, compensation and incentives linked to financial reporting and decision making
- Inducements including gifts and hospitality
- Responding to non-compliance with laws and regulations
- Pressure to breach the fundamental principles
Members in New Zealand undertaking audit and assurance work also need to adhere to the professional and ethical standards issued by the Auditing and Assurance Standards Board including the Code of Ethics for Assurance Practitioners.
Access the standards online
The NZICA Code of Ethics and APES 110 are both available in your Member Handbook.
The NZ Code of Ethics for Assurance Practitioners is available on the External Reporting Board's (XRB) website.
Standard setters for Australia (and other members resident outside NZ)
The Accounting Professional and Ethical Standards Board (APESB) sets the Code of Ethics and professional standards for Chartered Accountants ANZ, CPA Australia and IPA members.
The standards apply wherever members are located, except when prevented from so doing by specific requirements of local laws and/or regulations.
Standard setters for New Zealand
The New Zealand Regulatory Board of the New Zealand Institute of Chartered Accountants (NZICA) sets the professional and ethical standards applicable to members resident in New Zealand.
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