Microsoft Word Audit Quality-Framework Final vs 20140214
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- Input Factors 1.1. Values, Ethics and Attitudes – Engagement Level
| Appendix 2 39 Quality Attributes of Input- and Process Factors 1. This Appendix contains further descriptions of the quality attributes of input and process factors. These quality attributes apply at the audit engagement level, at the audit firm level, and at a national (or jurisdictional) level. Input Factors 1.1. Values, Ethics and Attitudes – Engagement Level 2. Key attributes are: The engagement team recognizes: that the audit is performed in the wider public interest; and the importance of complying with ethical requirements. The engagement team exhibits objectivity and integrity. The engagement team is independent. The engagement team exhibits professional competence and due care. The engagement team exhibits professional skepticism. 1.1.1. The Engagement Team Recognizes: that the Audit Is Performed in the Wider Public Interest; and the Importance of Complying with Ethical Requirements 3. The engagement team is committed to performing the audit in the interests of the entity’s stakeholders and in the wider public interest. The nature and extent of the public interest is likely to vary according to the nature of the entity. However, in all audits the engagement team needs to provide an appropriate degree of challenge to management, robustly express their views, and pursue matters to appropriate conclusions. 1.1.2. The Engagement Team Exhibits Objectivity and Integrity 4. The principle of objectivity imposes an obligation on auditors not to compromise their professional or business judgment because of bias, conflict of interest or the undue influence of others. 1 5. The need for auditors, in particular, to be objective arises from the fact that many of the important issues involved in the preparation of financial statements involve judgment. Few items included in the financial statements can be measured with certainty, and many involve estimation and therefore judgment. Auditors need to be objective when they evaluate management judgments to reduce the risk that the financial statements are materially misstated through management bias, whether deliberately or inadvertently. 1 International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code), paragraph 120.1 |