Page 82 - DCOM204_AUDITING_THEORY

Auditing Theory

Notes Integrity: Integrity of auditors establishes trust and thus provides the basis for reliance on their
judgment.
Objectivity: It includes making a balanced assessment of all the relevant circumstances and not
to be unduly influenced by their own interests or by others in forming judgments.

4.6 Review Questions

1. What are the qualifications of auditors as per section 226?
2. Identify disqualification criteria for auditors as per section 226.

3. Briefly explain different proponents of Section 314.
4. What do you understand by auditor’s code of ethics?
5. Under what circumstances as per section 314 a special resolution is required to be passed?
6. Identify various circumstances where section 314 is applicable.
7. What is the purpose of having code of ethics for working of an auditor?
8. What is the importance of the code of ethics for proper execution of duties by auditors?
9. What are the applicability and enforcement criteria for auditor’s code of ethics?
10. Auditors are expected to apply and uphold on what principles?
11. Identify various rules of conduct for an auditor based on different principles.
12. What are the implications of an auditor’s violation and disciplinary process?

Answers: Self Assessment

1. Independent
2. Own code of ethics
3. An office or place of profit
4. Knowledge and skill
5. A relationship of employer and employee; or such other person performs for and on
behalf of the company certain acts under the control, direction or supervision of the
company; also he is in receipt of consideration
6. Any director; Partner in a firm in which a director is a partner; Relative of such director
7. Managing Director; Manager; Banker; Trustee for the debenture holder
8. (d) 9. (b) 10. (a)
11. (c) 12. (b) 13. (b)
14. (c) 15. (a) 16. (c)
17. (c) 18. (c) 19. (a)

4.7 Further Readings

Books David Coderre, Internal Audit: Efficiency through Automation, John Wiley & Sons,
2009.

Emile Woolf, Moira Hindson, Audit and Accountancy Pitfalls: A Casebook for Practising
Accountants, Lawyers and Insurers, John Wiley & Sons, 2011.

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