What is the IFAC Code of professional Conduct if a client company has not paid its 2006 audit fees

61. A violation of the ethical standards would most likely have occurred when a CPAa.Made arrangement with a bank to collect notes issued by a client in payment of fees due.b.Joined an accounting firm made up of three non-CPA practitioners.c.Issued an unqualified opinion on the 2009 financial statements when fees for the 2008 auditwere unpaid.d.Purchased a bookkeeping firm's practice of monthly write-ups for a percentage of fees received over athree-year period.

62. Which of the following is a violation Confidentiality rule of the Code of Professional Conduct?

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63. In determining estimates of fees, an auditor may take into account each of the following, except the:

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64. A CPA, while performing an audit, strives to achieve independence in appearance in order to

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65. A client company has not paid its 2006 audit fees. According to the IFAC Code of Professional Conduct,for the auditor to be considered independent with respect to the 2007 audit, the 2006 audit fees must bepaid before thea.2006 report is issued.b.2007 report is issued.c.2008 fieldwork is started.d.2008 fieldwork is started.

66. The IFAC Code of Professional Conduct will ordinarily be considered to have been violated when themember represents that specific consulting services will be performed for a stated fee and it is apparent atthe time of the representation that the

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AT – Code of Professional Ethics Red Sirug Page 1

AUDITING THEORY Red Sirug

CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS

IN THE PHILIPPINES

(with Multiple Choice Questions)

Code of Ethics for Professional Accountants in the Philippines:

The

Code of Ethics for CPAs in the Philippines

is the document that contains the norms and principles

governing the practice of the accountancy profession in the highest standards of ethical conduct.

Preface to the Code of Ethics:

 Based on the revised Code of Ethics developed by the International Federation of Accountants (IFAC),

with certain modifications

 Approved by the Board of Directors of PICPA and recommended for adoption by the BOA

 Adopted by the BOA and approved by the PRC as part of the rules and regulations of the BOA for the

practice of the accountancy profession

 Sets the fundamental principles and provides guidance as to the application of such fundamental

principles to typical situations

 Compliance with the Code is mandatory for all CPAs and is applicable to all professional services

performed in the Philippines

 In case of noncompliance: Failure to comply with Code may result in an investigation into the

CPA’s conduct.

 When provision of the Code is in conflict with Philippine statutory requirement the Philippine statutory

requirement shall prevail.

Reasons why the Code was adopted:

a. To ensure the highest quality of performance; and

b. To maintain public confidence in the profession

Parts of the Code of Ethics:

1.

Part A

– general application of the Code and it applies to all professional accountants

 Part A establishes the fundamental principles of professional ethics for professional accountants

and provides a conceptual framework that serves as a guide for applying those principles

2.

Part B

– applies to professional accountants in public practice

3.

Part C

– applies to professional accountants in business

Fundamental Principles:

The fundamental principles arethe basic ethical requirements which are required to be observed and

complied with by professional accountants in order to achieve the objectives of the accountancy profession.

1. Integrity – A professional accountant should be straightforward and honest in all professional and

business relationships.

 Integrity implies not merely honesty but also fair dealing and truthfulness.

 To maintain integrity, a professional accountant should avoid association with information

(reports, returns, communications and other information) that contains materially false,

incomplete or misleading information or information that contains statements or information

furnished recklessly

2. Objectivity – A professional accountant should not allow bias, conflict of interest or undue influence of

others to override or compromise his professional or business judgment.

 Objectivity is a combination of impartiality, intellectual honesty and a freedom from conflicts of

interest.

 Relationships that bias or unduly influence the professional judgment of the professional

accountant should be avoided.

3. Professional competence and Due care:

a. Professional competence. A professional accountant has a continuing duty to maintain

professional knowledge and skill at the level required to ensure that a client or employer receives

competent professional service. Competent professional service requires the exercise of sound

judgment in applying professional knowledge and skill in the performance of such service.

Two phases of professional competence:

a. Attainment of professional competence: A professional accountant should have

initially a high standard of general education, followed by specific education, training,

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