Audit Regulatory Framework - Positive Aspects of Code of Ethics

2.0.0 MAIN REPORT

Accountancy professions are operating throughout the world in environment that different in cultures and regulatory requirement, thereafter, result to different mindset and principles towards ethics. IFAC's Code of Ethics is then positioning their mission at an important place as they manage to harmonize its Code throughout the world (IFAC, 2009) [online], in order to lessen the differences in thoughts, providing a standardized form of principles and reinforces the auditors independence (AI), so that the audited information will be comparable, valuable and reliable by users (Yusof, 2010). It is very often the independence is regarding to the external auditors (EAs).

2.1.1 Positive Aspects of Code of Ethics

As a set of self-governing guidance in providing judgments (Herron and Gilbertson, 2004), The Code plays a significant role in reinforcing independence by requiring auditors to comply with integrity, objectives, professional competence and due care, confidentially, and professional behavior (IFAC, 2009) [online]. Afterwards, it lays down threats to the principles above and giving the safeguards for auditors to impair the threats to acceptable level in case that the threats are impossible to be eliminated and these threats and safeguards have been interpreted in form of examples according to varies circumstances (IFAC, 2009) [online]. Furthermore, it demands that EAs shall determine potential threats to compliance, then, examine and address the degree of threats to optimal level by exerting the safeguards (IFAC, 2009) [online].

Meanwhile, IFAC addressed that each firm, member and professional bodies such as ACCA, MIA, etc. must be accomplished with the Codes (IFAC, 2009) [online] (Newquist, 2010) [online] and for those who against the requirements, when after proving with evidence, will soon to be removed from professional body. For an