IFAC and APB Ethical Standards for Accountants Essay

The International Federation of Accountants (IFAC) provides professional ethics and ethical codes for Accountants. They include standards of behaviour that are designed for both practical and idealistic purposes. In the accountancy profession, professional accountants should follow a set of rules and values to be able to execute the objectives needed to the highest standard of so called professionalism. IFAC requires throughout the world that accountancy bodies should issue codes of conduct not less rigorous than its own. Members are required to examine the spirit of the code as well as the specific requirements. Disobedience can lead to disciplinary proceedings. More specific guidance is included in the codes for accountants engaged in†¦show more content†¦Aware of this, directors may seek to influence the auditors by several ways and if shareholders suspect a gain interest relationship the appearance of independence is undermined. Related to the provision of assurance (external auditing), APB ethical standards have set frameworks that are intended to secure the independence of auditors. Some key examples are: a) Self interest threat, for example the amount of fees that are charged to clients for audit and other services are set by APB to 10% for plc clients and 15% for private company clients. Also when fees are overdue they are threatening objectivity, therefore the engagement letter should clarify the basis of fee charging and payment terms. Furthermore when auditors have shares in the company that are providing services for, gives rise to self interest threat and they should be disposed. b) Intimidation threat, for instance when either party auditor or clients are acting in an aggressive or dominant way then the auditor should consider resignation. c) Advocacy threat is when auditors argue in favour of their clients in litigation or a regularity investigation. For this to happen, it means that auditors are in close relationship with those in management hence it creates threats to the auditors’ objectivity (actingShow MoreRelatedAuditing of Educational Institutions4879 Words   |  20 PagesPractices Board (APB), (2002), defines audit of financial statements as an exercise whose objective is to enable auditors to express an opinion whether the financial statements give a true and fair (or equivalent) of the entity’s affairs at the periods and of its profit or loss or income and expenditure for the period then ended and have been properly prepared in accordance with the applicable reporting framework.( for example relevant legislation and applicable accounting standards ) or where statutoryRead MoreCons and Pros of Internet16245 Words   |  65 PagesInternational Accounting Policy Forum. pp. 5-27. 2006 5 International Financial Reporting Standards (IFRS): pros and cons for investors Ray Ball* Abstract—Accounting in shaped by economic and political forces. It follows that increased worldwide integration of both markets and politics (driven by reductions in communications and information processing costs) makes increased integration of financial reporting standards and practice almost inevitable. But most market and political forces will remain localRead MoreThe Government and Not-For-Profit Environment100975 Words   |  404 PagesTFinancial statements, no matter how prepared, do not directly affect the economic worth of an entity. 8. FThe Financial Accounting Standards Advisory Board’s standards do not apply to the federal Department of Treasury. 9. TGovernments may be subject to the same pressures that led to accounting scandals like Enron. 10. FThe Governmental Accounting Standards Board establishes generally accepted accounting principles for all state and local government entities, as well as all not-for-profit