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Audit 08 Journal
Audit 08 Journal
A-331
Internal Auditing Principles
1. Why is there a need for a Code of Ethics in the profession?
The acceptance of responsibility of any professionals for the people they serve is
represented by the Code of Ethics (Cabrera & Cabrera, 2020). A CPA must follow the
Code since many individuals and establishments depend upon the services CPAs cater
to their businesses or organizations. Other than that, the code of ethics also entails the
dos and don’ts in the accounting profession as it aims to make the standard of
competence complied upon while it regulates the relationship among the professionals.
In return for doing such, it protects the image of the accounting profession and the
professionals that work in the said field. It is like a guide or outline of what is to be done
firms and every individual in the organization must strictly follow the guiding principles of
the organization. According to the University of West Florida (2017), a need for the
Code of Ethics among professionals arises when they are to maintain their credibility
and trust of the public by administering honesty and integrity in the said profession.
Hence, for accountants, a set of Code of Ethics is pivotal for them to deal with the
public's interest as they continue to give confidence to the public as all professionals do
2. What are the fundamental principles of the Code to which the accountant is
required to comply?
Salac, Ramon Kristian
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Internal Auditing Principles
The International Federation of Accountants (2006) mentions that in the Philippines,
Getting an accountant’s name tied with any misleading or false information must
or at least prevent it from clouding their judgment which would result in a biased
ensure clients that they are receiving competent services that are accomplished
with the guidance of the standards. This principle has 2 portions: Attainment of
which are self-explanatory, but the Maintenance section is where the CPDs
social environment, clients, and even workmates and other individuals within the
3. What are the threats to compliance with the fundamental principles? Identify
Cabrera & Cabrera (2020) identifies the threats to compliance with the
accountants.
the said risks, these safeguards are measures applied or to be applied by accountants
to help them reduce threats to an acceptable level or eliminate the said threats
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Internal Auditing Principles
completely. They are to be distinguished into two categories, namely: those created by
the legislation, profession, and regulation; and those in the work environment.
legally empowered third party of the reports or any information produced by the
draw attention from the colleagues, employers, or the members of the public for
unethical behaviors made. These are the safeguards created by the profession,
legislation, and regulation but are not limited to these alone (Cabrera & Cabrera, 2020).
the policies and procedures regarding quality control; Monitoring policies and
and procedures; Leaders in the firm that stresses the importance of following the
the other hand include Having a professional accountant, which is not a member of an
assurance team, review the assurance work performed; Rotating senior assurance
procedure; Discussing ethical issues to personnel in charge with good governance; and
etc.
Salac, Ramon Kristian
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Internal Auditing Principles
5. What provisions under the Code of Ethics are unique for the practice of public
accounting?
Part B of the Code of Ethics from sections 200-290 is where the Code of Ethics
that pertains to the public practice of accounting is located. The content of each section
is as follows:
I. Section 200 – Introduction to the Code of Ethics in Public Practice and the
changes are explained in the Professional Appointment section. The Conflict of Interest
interest may arise and pose threats. The Second Opinions section is the section that
illustrates situations where accountants are asked for a second opinion in the
application of auditing reports, accounting, and other threatening factors and principles
Salac, Ramon Kristian
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Internal Auditing Principles
that may hinder compliance with the fundamental principles. The Fees and Other Types
of Remunerations is the section that pertains to the rules in billing or charging in the
proper and appropriate amount for them to be completely executed without any
compromise with the quality and standards required. The Marketing Professional
Services section is the one referring to the proper way of advertising, accountants are
not allowed to tarnish the reputation of the profession and the image of their fellow
professionals in doing so. The Gifts and Hospitality section discusses the threats to
Custody of Client Assets section is about the rules on holding a client’s assets since
section is about the rules in all kinds of services in accordance with objectivity and
Engagements talks about the independence of the accountant and the firm to a client.
6. What provisions under the Code of Ethics are unique for professional
accountants in business?
These provisions are located in the Code of Ethics part C of the code starting
Conflicts section is about situations that may cause an accountant to act against what is
to be expected from him/her or be forced to act against his or her will. The preparation
and Reporting Information section pertains to the policies in making and maintaining
appropriate information for the clients. The Acting with sufficient Expertise section is all
about the responsibility of the accountant to only venture into businesses that may
benefit the firm and the accountants' experience and expertise. While the Financial
Interest section explains the threats of non-compliance with the principles because of
familiarity. Lastly, the inducements section is all about the actions when receiving offers
Cabrera, E., & Cabrera, G. A. (2020). Principles of Auditing and Assurance Services
(2020th ed.). Gic Enterprises & Co., Inc.