The Ethical Auditor a) While discussing money problems, a friend outlines to you his get-rich-quick scheme involving investments

in an IT company that happens to be one of your firms audit clients. You know that the company is in serious financial difficulties and has going concern issues. Fundamental principle in this case is confidentiality. Here, I as the auditor should not disclose Any information regarding the firms audit clients even though, I acknowledge that the firm in serious financial difficulties and going concern issues. However, I give advice to my friend to seek advice from a financial analyst on the companys financial performance and stability which he/she going to invest. Or other advises to stop her/his get-rich-quick scheme. The scheme might involve procedure that prohibit by law and it is non- sense today people can rich quickly without hardworking. b) You have recently inherited a number of shares in different companies. You recognise some of the company names and suspect that your firm may act for them in one capacity or another. Based on the scenarios above, where I have inherent a number of shares in audits client company. In this situation, Im not complying with the fundamental principle in section 120, which is the principle of objectivity. This, relationship between me and the client has created a self-interest threat to my judgement. Where there is element of bias in performing my professional service where I have financial interest in that company. Safe guard in my situation depend on the degree of significant effect on my profession. The threat to my objectivity can be avoided if I take decision not to audit to the companies which I have inherent shares. Besides, I might sell all my shares in audits client companies. c) Your friend runs a small direct sales business selling cosmetics outside her full-time as accounting job. You know that she frequently uses the firms time and facilities to conduct her business during official work hours. Fundamental principle for this case is professional competence and due care under section 130. As a professional accountant, it is eligible to maintain a professional competence in performing task. However, in this case as an assumption, my friend has told the management that she/he conduct small direct sales business selling cosmetics and management not prohibit her to do her/his business and she/he can maintain professional competence as accountant. Thus, I ignore and no action taken. If in the company policies that prohibit professional accountant involve any business. First, I might advise my friend to stop her/his direct sales business or hire someone to manage her/his business. If, she/he is still continuing her/his business and discredit this profession, this matter will be informed to the management.

d) While working on an audit assignment at a clients premises, you have become wellknown and liked by the management. As a thank-you when you leave, you are invited to lunch by the management and are also offered a chance to buy the companys goods at staff discount prices. Professional behaviour under section 150 is the fundamental principle. As a professional accountant I should comply with the law and regulation. In this case, I might accept to go lunch with the management since they intention is to appreciate work of audit that I have done for the firm. But, Im not accepting to buy the companys goods at staff discount prices. Having lunch with the management of audits client might not consider my jeopardy my independence in mind or even towards the third party. This might threat to my independence as an auditor to third party that might discredit my profession.

e) Alone in the office one evening, you receive a telephone call from a taxation official conducting a fraud enquiry, asking for information about one of your firms clients to help in an investigation they are pursuing. The fundamental principle in this case is confidentiality. Which I not suppose to disclose any information of audits client but exception to if the disclosure is required by the law or appropriate public authorities. However, before that I should confirm whether the telephone call is from the taxation office. If its not, I should not disclose to them any information of the audits client which I might accountable for my action. If its true that is from taxation office and conducting fraud enquiry.