Wednesday, 1 January 2020

Unit 14: Professional Ethics and Current Issues

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Unit 14: Professional Ethics and Current Issues

The professional bodies require strict adherence to the ethical codes and have considerable enforcement mechanisms.

Necessarily, ethical codes should be obeyed in the spirit as well as the letter but often are not.

Non-compliance means acts of omission or commission by the entity which is contrary to the prevailing laws or regulations.

Section 211(3A) of Companies Act, 1956 provides that every profit and loss account and balance sheet of the company shall comply with the accounting standards.

Auditing, like many other disciplines, is a fast changing discipline.

There are a surprisingly large number of current issues.

E-commerce is a system of conducting business over the internet by electronic rather than paper-based methods.

In E-commerce, documents such as invoices are exchanged using a standard method known as Electronic Data Interchange (EDI).

Many firms now put their financial statements on the web.

This presents problems for the auditor as financial statements on the web may be altered.

Forensic accounting/auditing can be defined as accounting/auditing skills to situations that have legal consequences.

Forensic accountants detect and interpret the evidences of both normal (non-fraudulent) and abnormal (fraudulent) phenomena introduced into the books and records of an accounting system (expansively defined) and the resultant effect upon the accounts, inventories, and the presentation thereof.

An information system is not just a computer.

Today’s information systems are complex and have many components that piece together to make a business solution.

IT audit is a part of the overall audit process, which is one of the facilitators for good corporate governance.


Accounting Standards: Accounting Standards are the statements of code of practice of the regulatory accounting bodies that are to be observed in the preparation and presentation of financial statements.

Audit Operation: The Audit operation refers to an examination of auditing records undertaken with a view to establishing the correctness or otherwise of the transactions reflected therein.

E-commerce: E-commerce is a system of conducting business over the internet by electronic Notes rather than paper-based methods.

Electronic Data Interchange (EDI): In E-commerce, documents such as invoices are exchanged using a standard method known as Electronic Data Interchange (EDI).

Forensic Accounting: Forensic accounting/auditing can be defined as accounting/auditing skills to situations that have legal consequences.

International Standard on Auditing (ISA): The International Standard on Auditing (ISA) deals with the auditor's responsibility to consider laws and regulations in an audit of financial statements.

Non-compliance: The term "non-compliance" as used refers to acts of omission or commission by the entity being audited, either intentional or unintentional, which are contrary to the prevailing laws or regulations.

Secure Electronic Transmission (SET): Secure Electronic Transmission (SET) is an extension of EDI.
Using SET, monies can be transferred primarily through credit card payments.

E-commerce raises various risks for firms applying it and for auditors as well.


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