Professional Ethics - AUDIT AND ASSURANCE - Lecture 3 notes

Module: Audit and Assurance


Lecture 3 – Professional Ethics


What is ethics? Moral behaviour

Lecture outline
We are looking at ethics applied to auditors and the safeguards when an auditor’s
independence is threatened.


Ethics – Definition
A Set of moral principles, values and rules.


Prescribed Ethical Principles
 Trustworthiness
 Respect
 Responsibility
 Fairness
 Caring
 Citizenship
 All these principles applies to auditors


Professional Code of Ethics
 Auditors must obey these principles
 Integrity = a high degree of honesty
 Objectivity = apply judgement in such a way that you are not biased. It goes
hand in hand with independence. If you are not independent, then you cannot
make objective decisions.
 Professional Competence = having the knowledge and experience and the
knowhow. To have continuous professional development.
 Due care = have care and caution. To avoid negligence.
 Confidentiality  to not disclose information to a third party. Don’t use the
information you have obtained from the client for your own personal gain.
 Professional Behaviour  conduct yourself in such a manner that you don’t
disgrace the audit profession.

Independence mean freedom from influence.

Professional Code of Ethics - Threats