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MIA by law - Coggle Diagram
MIA by law
Professional Accountants in Public Practices
Section 321 Second Opinions
Providing a second opinion to an entity that is not an existing client might create a self-interest or other threat to compliance with one or more of the fundamental principles.
Section 330 Fees and Other Types of Remuneration
Quoting a fee lower than another accountant is not in itself unethical. However, the level of fees quoted creates a self-interest threat to compliance with the principle of professional competence and due care ifmthe fee quoted is so low (could be due to low-balling).
The factors that may create self-interest threats; A large portion of the audit firm’s total earnings from one client, overdue fee of an audit client, and contingent fee.
Section 320 Professional Appointments
To accept the appointment, the auditor need to eliminate or reduce the threats to an acceptable level with proper safeguards. Otherwise, the auditor should decline the appointment.
Section 340 Inducements, including Gifts and Hospitality
Examples of safeguards in accepting inducements; Being transparent with senior management of the firm or of the client about offering or accepting an inducement, reimbursing the cost of the inducement
Section 310 Conflict of Interest
Providing services to a seller and a buyer in relation to the same transaction,
Preparing valuations of assets for two parties who are in an adversarial position with respect to the assets.
Section 350 Custody of Client Assets
Section 300 Applying the conceptual Framework - Professional Accountants in Public Practices
Section 360 Responding to Non-Compliance with Laws and Regulations
Non-compliance with laws and regulations comprises acts of omission or commission, intentional or unintentional, which are contrary to the prevailing laws or regulations committed by the following parties: client;
Those charged with governance of a client; Management of a client; or Other individuals working for or under the direction of a client
Independence for audit review and engagements
Section 420 Gifts and Hospitality
Section 430 Actual or Threatened Litigation
Factors that are relevant in evaluating the level of such threats include:
The materiality of the litigation.
Whether the litigation relates to a prior audit engagement.
Section 410 Fees
When the total fees generated from an audit client by the firm expressing the audit opinion represent a large proportion of the total fees of that firm, the dependence on that client and concern about losing the client create a self-interest or intimidation threat.
Section 511 Loans and Guarantess
Section 400 Applying the Conceptual Framework to Independence for Audit and Review Engagement
Independence is linked to the principle of objectivity and integrity
Independence of mind and Independence in appearance
Section 510 Financial Interest
Section 520 Business Relationship
In determining whether such a relationship is material to an individual, the combined net worth of the individual and the individual’s immediate family members may be taken into account.
Independence for audit review and engagements
Section 524 Employment with an Audit Client
Section 525 Temporary personal Assignments
A firm or network firm shall not loan personnel to an audit client unless : Such assistance is provided only for a short period of time
Section 523 Serving as a Director of Officer as an Audit Client
A partner or employee of the firm or a network firm shall not serve as a director or officer of an audit client of the firm.
Section 540 Long Association of Personnel
(Including Partner Rotation) with an Audit Client
Although an understanding of an audit client and its environment is fundamental to audit quality, a familiarity threat might be created as a result of an individual’s long association
Section 522 Recent Service with an Audit Client
Section 600 Provision of Non-Assurance Services
to an Audit Client
Subsection 601 Accounting and Bookkeeping Services
Subsection 604 Tax Services
Subsection 605 Internal Audit Services
Subsection 606 Information Technology Services
Section 521 Family and Personal Relationship
A self-interest, familiarity or intimidation threat is created when an immediate family member of an audit team member is an employee in a position to exert significant influence over the client’s financial position, financial performance or cash flows.
Section 500 - method of practice.
B210.1 –B210.5 Professional Indemnity Insurance
Carries and maintains professional indemnity insurance
policy.
Required to purchase policies from licensed insurance
companies.
Maintain professional indemnity insurance policy with a
minimum coverage of RM250,000, upon commencement of public practice.
A member in public practice is not allowed to practice as a
chartered/ licensed accountant other than:
in his or her own name,
in the name or names of his or her partner or partners,
being chartered accountants or licensed accountants;
in the name of a firm existing at the time of the coming into
operation of the Act or formed thereafter provided that the partners in Malaysia are eligible to be registered as chartered
accountants or licensed accountants
B240.1 – B240.2 Referrals
Where a practitioner receives an assignment by referral, he should not provide any other professional services to the referring member's client without informing the referring member.
The referred practitioner should not do anything that will
impair the position of the referring practitioner in the continuing work for the client
SECTION B220 Death or Incapacity of a Sole
Practitioner
Arrangements should be made within two (2) years from
the date of the firm’s set up and provide for the practice to be continued as a going concern he recovers or the representatives of his estate decide to dispose of the practice.
B250.3 – B250.11 PRACTICE REVIEW
The objective of Practice Review programme is to ensure
that all members in public practice comply with all applicable professional standards, legal and regulatory requirements in the performance of their work.
For those firms not covered by AOB.
Part 1- Complying with the code, fundamental principle and conceptual framework
Section 100 - Complying with the code
R - Obligations
MY - Malaysia
A - context, explanations, suggestions for actions or matters to consider, illustrations, other guidance to understand the Code
Shall - strict requirement to comply
Section 110 - The Fundamental Principle
Subsection 111 Integrity: requires an accountant to be straightforward and honest in all professional and business relationships.
Subsection 112 Objectivity: imposes an obligation on all
professional accountants not to compromise their professional or business judgment because of bias, conflict of interest or the undue influence of others.
Subsection 113 Professional competence and due care:
requires a continuing awareness and an understanding of relevant technical, professional and business developments
Subsection 114 Confidentiality: requires an accountant to
respect the confidentiality of information acquired as a result of professional and business relationships.
Subsection 115 Professional behaviour: requires an
accountant to comply with relevant laws and regulations and avoid any conduct that the accountant knows or should know
might discredit the profession.
Section 120 - Conceptual Framework
Applying Conceptual Framework
Evaluate the threats identified
Address the threats by eliminating or reducing
them to an acceptable level
Identify threats to compliance with the
fundamental principles
Intimidation threat - from actual/perceived pressures, e.g. undue influence over the accountant
Self-interest threat - financial or other interest
Self-review threat - unable to appropriately
evaluate results of a previous judgment/activity by the accountant or another individual
Familiarity threat - from long/ close relationship with a client/ employing organization and becomes sympathetic or too accepting
Advocacy threat - promote client’s/employing organization’s position that compromise objectivity