(Ref: Para. 6)

The auditor, assurance practitioner, engagement quality control reviewer, and firm are to have regard to the applicable requirements of APES 110 Code of Ethics for Professional Accountants (including Independence Standards), issued by the Accounting Professional & Ethical Standards Board Limited in November 2018, which are to be taken into account in determining whether relevant ethical requirements referred to in paragraph 6 of this Auditing Standard have been met.  In relation to audits and reviews undertaken in accordance with the Corporations Act 2001, the provisions of Division 3 Part 2M.4 of the Act may also apply.

APES 110 establishes the fundamental principles of ethics which are: 

• Integrity;
• Objectivity;
• Professional competence and due care;
• Confidentiality; and
• Professional behaviour.

The fundamental principles of ethics establish the standard of behaviour expected of the auditor, assurance practitioner, engagement quality control reviewer, and firm, when performing audits, reviews and other assurance engagements.

APES 110 provides a conceptual framework to apply in order to identify, evaluate and address threats to compliance with the fundamental principles. 

APES 110 specifies Independence Standards, which set out requirements and application material on how to apply the conceptual framework to maintain independence when performing audits, reviews or other assurance engagements.  The auditor, assurance practitioner, engagement quality control reviewer, and firm are required to comply with these standards in order to be independent when conducting such engagements.  The conceptual framework to identify, evaluate and address threats to compliance with the fundamental principles applies in the same way to compliance with independence requirements.

APES 110 describes independence as comprising both independence of mind and independence in appearance.  Independence safeguards the ability to form an assurance conclusion without being affected by influences that might compromise that conclusion.  Independence allows the ability to act with integrity, to be objective and to maintain an attitude of professional scepticism.

The fundamental principles in APES 110 are reinforced in particular by:

• The leadership of the firm;
• Education and training;
• Monitoring; and
• A process for dealing with breaches.

The definition of terms in APES 110 may differ from the definitions of those terms in Australian Auditing Standards including terms defined in ASQC 1, ASA 200 and ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information. 

In complying with the requirements of this Auditing Standard, the definitions used in APES 110 apply in so far as is necessary to interpret the ethical requirements of ASQC 1, ASA 200 and ASA 220.