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FINANCIAL AUDIT

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The purpose of an audit miss ion is to express an objec tive,

independent and reasonable opinion

The audit is to be per formed by a person having adequate

technical training & proficiency as an auditor

In all matters relating the assignment, an independence in

mental attitude is to be maintained by the auditor.

Sufficient evidence is to be obtained through audit procedures

to afford a reasonable basis for an opinion regarding the

financial statement.

The report shall state whether the financial statements are

presented in accordance with generally accepted accounting

principles

REMEMBER THAT

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In 1930 Rotary International developed its own code of ethics that is still

extensively used by millions of businesspeople. It uses four questions that

are called the four way test of ethical behavior for any ethical issue a

business faces:

1. Is it the truth?2. Is it fair to all concerned?

3. Will it build goodwill and better friendships?

4. Will it be beneficial to all concerned?

In recent years, frameworks were developed in order to help professionals resolveethical dilemmas. The purpose of such a framework is in identifying the ethical

issues and deciding on an appropriate course of action using the persons own

values. There is a six step approach to any ethical dilemma:

- Obtain the relevant facts

- Identify the ethical issues from the facts

- Determine who is affected by the outcome of the dilemma and how eachperson or group is affected.

- Identify the alternatives available to the person who must resolve the

dilemma

- Identify the likely consequence of each alternative

- Decide the appropriate action

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RULES OF CONDUCT FOR FINANCIAL

AUDITORS

Rule ofconduct

ApplicabilityInterpretation

All membersPublic

practice

Independence x

Transactions, interests or relationships affecting independence

Honorary directorships and trusteeships

Former practitioners and firm independenceAccounting services

Effect of family relationships on independence

Meaning of normal lending procedures, terms and procedures

The effect of actual litigation on independence

Extended audit services

Integrity and

objectivityx

Knowing that misrepresentations exists in the preparation of financial statements and records

Conflicts of interest

Members performing educational services

Professional services involving client advocacy

General

standardsx Competence

Compliance

with standardsx Competence in applying the practice standards

Confidential

client

information

x

Confidential information and technical standards

Disclosure of confidential client info in certain circumstances

Confidential information and the purchase, sale or merger of a practice

Contingent fees x None accepted