ACCA AAA ^UK Syllabus B. Professional and Ethical Considerations - Conceptual Framework - Notes ^{7 / 9}

The conceptual framework works like this..

1. Identify the threat that may cause a fundamental principle to be broken

2. The fundamental principle how likely is it to be broken?

3. Limit the risk if the threat is more than negligible - to an acceptable level

There are 3 types of safeguard

which can limit the risk

• Profession

  • Training & Education Gaining experience at work, passing your exams :) & CPD on ethical matters

  • Legislation On things such as who is fit and proper to become an auditor

  • Corporate Governance regulations These often set out best practice for some ethical situations

• Individual

  • CPD Keeping up to date with auditing standards and developments

  • Networks Keeping in contact with other professionals to discuss matters informally or contacting ACCA for guidance

  • Independent Mentor A formal relationship with another auditor to discuss ethical threats on a confidential basis

• Work

  • Codes of Conduct created and followed by the firm with controls and procedures in place

  • Ethical Standards Relating to audit engagements such as discussions with audit committees and staff rotation policies