Task1. The Code of ethics for auditors establishes the fundamental principles of professional ethics and provides a conceptual framework for applying those principles.
Required:
Question1. Identify and briefly describe the four fundamental principles which an auditor is required to comply.
Question2. The circumstances in which auditors operate give rise to specific threats to compliance with the fundamental principles. Describe the five categories of threats that auditors face. Your answer should include one example of each.
Question3. Safeguards may eliminate or reduce such threats to an acceptable level. Identify and describe two categories of safeguards that may eliminate or reduce such threats.
Question4. Explain how the objectivity and independence of the external auditor may be threatened or appear to be threatened where:
(i) The firm, its partners or staff have any financial interest in an audit client.
(ii) There are family or other close personal or business relationships between the firm, its partners or staff and other audit client.