Ethical Requirements Relating to an AudiEthical Requirements Relating to an Audit of a Financial Report

Ethical Requirements Relating to an Audit of a Financial Report

7 The auditor shall comply with relevant ethical requirements relating to audit engagements.

8 As discussed in ASA 220 Quality Control for Audits of Historical Financial Information, relevant ethical requirements relating to an audit of a financial report ordinarily comprise the applicable code of conduct of a professional accounting body.[1] ASA 220 identifies the fundamental principles of professional ethics established by the applicable code of conduct of a professional accounting body and sets out the engagement partner’s responsibilities with respect to relevant ethical requirements relating to audit engagements. ASA 220 recognises that, unless information provided by the firm or other parties suggests otherwise, the engagement team is entitled to rely on a firm’s systems in meeting its responsibilities with respect to quality control procedures applicable to the individual audit engagement, for example, in relation to:

• capabilities and competence of personnel through their recruitment and formal training;
• independence through the accumulation and communication of relevant independence information;
• maintenance of client relationships through acceptance and continuance systems; and
• adherence to regulatory and legal requirements through the monitoring process.

Accordingly, the quality control requirements for firms[2] issued by a professional accounting body require the firm to establish policies and procedures designed to provide it with reasonable assurance that the firm and its personnel comply with relevant ethical requirements.