EG Module 1

Society responds by imposing external regulation to ensure accountability and protect public interest.

The AARF was involved in the design and promulgation of guidance for the accounting profession.

Auditors must identify governance, decide on assurance levels, ensure budget sufficiency, create audit plans, evaluate results, and communicate findings appropriately.

Integrity serves as the foundation of CPA Australia's ethos, emphasizing the importance of ethical behaviour in the profession.

The Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB).

APESB operates independently, transferring the setting of professional and ethical standards from the professional accounting bodies to itself, while members of these bodies must abide by APESB standards.

The implied social contract is based on the core notion that the profession will act in the public interest and uphold ethical standards.

The focus is on the performance of the professional, where individual accountants accept responsibility for maintaining and updating their knowledge and skills, applying them with due professional care.

Pro bono work refers to the provision of unpaid services for the public good, where accountants offer their time and skills free of charge to the community.

The key components include governance and leadership, professional standards, independence, acceptance and continuance of client relationships, resources, engagement performance, information and communication, and monitoring and remediation.

Penalties may include suspension from membership, fines, admonishment, severe reprimands, cancellation or suspension of certificates, restrictions on the use of intellectual property, lowering of membership status, additional professional development hours, and other appropriate penalties.

The governing body ensures that the profession's attributes are achieved and maintained, speaks for the profession on public policy matters, ensures education standards for entrants, encourages high standards of conduct, applies disciplinary sanctions, and maintains credibility.

The powers to set accounting and auditing standards have been removed from the profession and now reside with the AASB and AUASB, which report to the FRC.

The quality management issues include the robustness of the firm's policies and procedures, which have not been reviewed, potentially leading to conflicts of interest. Ethical issues arise from the employee's interest in a competitor's business, which could compromise client confidentiality and trust.

Co-regulation refers to the mix of external regulation imposed by society and self-regulation undertaken by the peak bodies of the accounting profession.

ASQM 1, ASQM 2, and ASA 220 must be applied to the assurance practice.

Yes, the Board may publish the name of any member whose conduct has been regulated, along with details of the determination and any penalties imposed.

No, the complaints process does not investigate issues relating to fees, as these are considered a commercial matter between members and their clients.

The CLERP 9 legislation reconstituted the AUASB as a body corporate under the Australian Securities and Investments Commission Act 2001.

Independence is crucial for maintaining objectivity and integrity, especially when facing client pressures.

The APESB reviews professional and ethical standards yearly, monitors the needs of the accounting profession, implements new standards, seeks public comment on exposure drafts, and monitors the effectiveness of standards.

Practice assessments occur every three, five, or seven years, depending on the complexity of the member's practice.

Professional conduct should be guided by the public interest rather than self-interest.

The complainant should first attempt to resolve the matter directly with the CPA Australia member.

Penalties can include forfeiture of membership and other conditions regarding readmission.

Joining CPA Australia means committing to uphold the reputation of the CPA designation by adhering to the obligations outlined in CPA Australia’s Constitution, By-Laws, and Code of Professional Conduct.

If the member does not pay within 30 days, their membership is forfeited, and no appeal is available under this provision.

Professional judgement is essential as it differentiates professionals from non-professionals, enabling them to diagnose and solve complex, unstructured values-based problems.

Accountants are held to the same level of responsibility for all their work, whether paid or unpaid, and must bring the same care and skill to volunteer work as they do to paid assignments.

Changes in laws at a Commonwealth level.

APES 320 applies to the non-assurance practice and engagements.

The Code of Ethics establishes expected standards of behaviour and the need for members to act in the public interest, deterring unethical behaviour and promoting desirable conduct.

This distinction is critical as it affects accountability and the legal implications of an accountant's decisions, particularly in auditing where judgements are scrutinized in courts.

The self-regulatory aspect has changed to a co-regulatory situation, where accounting standards boards now report to government bodies instead of professional accounting bodies due to past failures.

The guidance has been revised to eliminate references to auditing and assurance services, focusing instead on non-assurance services.

Co-regulation involves the profession regulating itself in combination with external authorities to maintain high professional standards.

Professional judgement involves an awareness of uncertainty, complexity, instability, uniqueness, and value conflict, requiring professionals to choose outcomes that align with social ideals rather than just client needs.

APES 205 Conformity with Accounting Standards and APES 210 Conformity with Auditing and Assurance Standards are mandatory statements issued by APESB.

Members must demonstrate compliance with quality control standards, provide a signed assurance annually, and undergo a practice review.

Documentation related to policies and procedures designed to ensure compliance with relevant ethical requirements.

Independence is crucial to ensure that firms comply with ethical requirements when providing non-assurance services to clients for whom they also provide assurance services.

Members must use their professional judgement free from external influence and financial gain or loss.

Members often face personal, financial, and other pressures that can lead them to prioritize self-gain over their duty to protect the interests of third parties and the trust of the public.

CPA Australia has a formal process for complaints that includes investigation and disciplinary actions, guided by principles of procedural fairness, confidentiality, independence, and the right to appeal.

A complaint can be raised by any person, including members of the public, members of CPA Australia, or the General Manager Professional Conduct (GMPC) of CPA Australia.

Accountants contribute by preparing and attesting information that ensures the efficient functioning of businesses, not-for-profits, and government enterprises, facilitating better decision-making for individuals and organizations.

The program ensures members subject to review have implemented adequate processes to manage work quality and practice risks, and comply with professional and ethical standards.

APES 320 provides guidance on establishing a quality management system (QMS) to ensure that a firm’s outputs are appropriate and that the practice complies with professional, regulatory, and legal requirements.

The Chief Executive Officer (CEO) of CPA Australia determines this based on the GMPC’s recommendation and any relevant external advice.

Professional and ethical standards aim to ensure that members work to the highest level of professionalism, providing quality service that achieves credibility and public confidence.

Professional judgement is significant as it allows accountants to make decisions based on analysis and ethical considerations rather than merely following rules.

Business services, taxation services, forensic accounting services, valuation services, insolvency services, corporate finance services, and financial planning services.

AI is expected to influence professional judgement by automating routine tasks, allowing accountants to focus more on complex decision-making and value-based judgements.

APESB sets professional standards for accountants and was established to enhance the ethical standards and professional conduct within the accounting profession.

The AUASB's power means that auditing standards have the force of law, making compliance a legal duty for registered auditors.

ASQM 1 and PES 3 are standards that deal with quality management for firms providing auditing and assurance services, effective from December 2022, and represent updated versions of previous standards.

Accreditation for accounting degree programs, membership qualification processes, continuing professional education requirements, a code of ethics, and a disciplinary process.

A code of ethics establishes principles for good conduct that members of the accounting profession are required to practice in accordance with.

Different cultures may have varying perceptions of acceptable behaviour, which can challenge accountants to adhere to ethical guidelines without offending local customs.

The ethos or culture consists of values, norms, and symbols that define what is important to the profession and guide the behaviour of its members.

The accounting profession ensures people have access to accurate and useful financial information, which is crucial for making informed decisions about resource allocation.

Actions include making false declarations, engaging in dishonourable practices, failing to observe professional standards, and becoming insolvent, among others.

A file will be opened to address the issue, and it will be allocated to a Professional Conduct Officer (PCO) for investigation.

It involves ongoing evaluation of the firm’s system of quality control, including periodic inspections of completed engagements and taking action to address identified deficiencies.

Continuing professional development is important as it ensures that accounting professionals maintain their knowledge and skills throughout their careers.

It is crucial for accountants to make informed decisions that go beyond mere compliance with rules, ensuring that their work provides genuine value and addresses the right problems.

The firm is required to apply APES 320 for the quality management of engagements.

Appendix 3 of ASRS 4400 provides differentiating factors between agreed-upon procedures engagements and assurance engagements.

Autonomy and independence are crucial for maintaining trust between the community and the profession, allowing accountants to self-regulate, although this has shifted to a co-regulatory situation due to past unprofessional conduct.

APESB was established to create a more rigorous and transparent process for setting ethical requirements and to enhance public confidence in the profession.

Consequences may include disciplinary action, penalties such as forfeiture of membership, fines, additional professional development, or reprimands.

A profession like accounting is distinguished by a systematic body of knowledge, extensive education, an ideal of service to the community, high autonomy, a code of ethics, a distinctive ethos, application of professional judgement, and the existence of a governing body.

An adverse event refers to an event in which a member obtained admission by improper means, such as making a false declaration on the application for membership.