Auditor‟s professional responsibilities are governed basic principles. Comment.
Compliance with the basic principles requires the application of auditing procedures and reporting practices appropriate to the particular circumstances.
Basic principle are those principles, which govern the auditor‟s professional responsibilities and same should be complied with whenever an audit is carried out.
i. Integrity, Objectivity and Independence
The auditor should be straight forward, honest and sincere in his approach to his professional work. He should maintain an impartial attitude and both be and appear to be free of any interest, which might be regarded, whatever is actual effect, as being incompatible with integrity and objectivity.
The auditor should respect the confidentiality of information acquired in the course of his work and should not use or disclose any such information to third party without specific authority or unless there is a legal or professional right or duty to disclose.
iii. Skills and Competence
The auditor should perform and report prepared with due professional care persons who have adequate training, experience and competence in auditing. The auditor requires specialized skills and competence along with a continuing awareness of developments of accounting and auditing matters and relevant regulations and statutory requirements.
iv. Work performed others
When the auditor delegates work to assistants or uses work performed other auditors and experts, he continues to be responsible for forming and expressing his opinion on the financial information. However, he will be entitled to rely on work performed others, provided he exercises adequate skill and care and is not aware of any reason to believe that he should not have so relied.
The auditor should document matters, which are important in providing evidence that the audit carried out in accordance with the basic principles.
The auditor should plan his work to enable him to conduct an effective audit in an efficient and timely manner. Plants should be based on a knowledge of the client‟s business.
vii. Audit evidence.
The auditor should obtain sufficient appropriate audit evidence through the performance of compliance and substantive procedures to enable him to draw reasonable conclusions there from on which to base his opinion on the financial information.
viii. Accounting system and Internal Control
The auditor should gain an understanding of the accounting system and related controls and should study and evaluate the operations of those internal controls upon, which he wishes to rely in determining the nature, timing and extent of other audit procedures.
ix. Audit conclusion and reporting.
The auditor should review and assess the conclusions drawn from the audit evidence obtained and from his knowledge of business of the entity as the basis for the expression of his opinion on the financial information. The audit report should contain a clear written opinion on the financial information and should comply the legal requirements. When a qualified opinion, adverse opinion or a disclaimer of opinion is to be given or reservation of opinion on any matter is to be made, the audit report should state the reason therefore.
As per Handbook of Code of Ethics for Professional Accountants issued ICAN, A professional accountant shall comply with the following fundamental principles:
a) Integrity – to be straightforward and honest in all professional and business relationships
b) Objectivity – to not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
c) Professional Competence and Due Care – to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques and act diligently and in accordance with applicable technical and professional standards.
d) Confidentiality – to respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the professional accountant or third parties.
e) `Professional Behavior – to comply with relevant laws and regulations and avoid any action that discredits the profession