I have been asked to audit a NFP. Am I qualified and eligible to do
the audit?
The auditor of an organisation takes on a personal responsibility and
liability. If the auditor is a member of the Institute, to carry
out that responsibility they must meet the requirements of the Code of
Ethics. The Code of Ethics sets out the standards that must be
applied in conjunction with the relevant professional standards.
Code of Ethics
The code of ethics sets out five fundamental principles that must be
applied to all professional work undertaken including assurance
assignments. These principles are:
Integrity
Members must behave with integrity in all professional and business
relationships. Integrity implies not merely honesty but fair dealing and
truthfulness.
Objectivity and independence
Members must be fair, impartial and intellectually honest, and must not
allow prejudice or bias, conflict of interest or influence of others to
override objectivity. Members undertaking engagements must be, and be
seen to be, Independent.
Competence
Members must only undertake professional work in which they have the
competence necessary to perform the work to the technical and
professional standards expected.
Quality performance
Members must perform their professional work with due care and
diligence, ensuring that all professional obligations are completed in a
timely manner and are carried out in accordance with the relevant
technical and professional standards appropriate to that work.
Professional behaviour
Members must act in a manner consistent with the good reputation of the
profession and refrain from any conduct which might bring discredit to
the profession.
Independence
Additionally, there is a further code containing requirements relating
to independence in assurance assignments addressing issues that arise in
this type of assignment. The Institute has noted that the most
common issues amongst members in the assurance area is failure to meet
the mandated work standards resulting from lack of personal competence
in auditing, and failure to maintain independence.
The member must be truly independent from the organisation remembering
that independence is often not reality, but the perception of those
around. They also need to be familiar with the auditing standards
and experienced in undertaking audits. This means that their file
will need to be able to standalone and demonstrate (document) compliance
with all of the auditing standards and professional standards.
Links:
- The Institute code of ethics (PDF: 317 KB)
- Auditing standards and guidelines
