Application and Other Explanatory Material
The auditor, assurance practitioner, engagement quality 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 APESB, 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:
- 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 reviewer, and firm, when performing audits, reviews and other assurance engagements.
APES 110 provides a conceptual framework that establishes the approach which the auditor, assurance practitioner, engagement quality reviewer and firm are required to apply when identifying, evaluating and addressing threats to compliance with the fundamental principles.
In the case of audits, reviews and other assurance engagements, APES 110 sets out Independence Standards, established by the application of the conceptual framework to threats to independence in relation to those engagements.
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 enhances the ability to act with integrity, to be objective and to maintain an attitude of professional scepticism.
The definition of terms in APES 110 may differ from the definitions of those terms in AUASB Standards.