IAASA Ethical Standard for Auditors (Ireland)

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The IAASA Ethical Standard for Auditors (Ireland) 2020 outlines the ethical requirements and guidelines for auditors. Part B Section 1 of this standard, titled "General Requirements and Guidance," provides crucial insights into the ethical responsibilities of auditors.

One of the key aspects of this section is the identification of the principal types of threats to the integrity, objectivity and independence of the firm and covered persons being: •self-interest threat •self-review threat •management threat •advocacy threat •familiarity (or trust) threat •intimidation threat.

Another significant point in this section is the role of the Ethics Partner. 

According to the standard, senior management should designate a partner with the necessary seniority, relevant experience, authority, and leadership levels to ensure the firm's compliance with supporting ethical provisions. The Ethics Partner should not undertake another role within the firm that conflicts with their responsibilities as an Ethics Partner. This role is the final stop for any decisions on ethical or independence issues, making it a vital position within the firm.

The section also highlights the importance of communication with those charged with governance. It mandates that the engagement partner shall ensure that those charged with governance of each entity relevant to an engagement, and, any other persons or entities the firm is instructed to advise, are appropriately informed on a timely basis of all significant facts and matters that may bear upon the integrity, objectivity and independence of the firm or covered persons. 

Communications between the firm and those charged with the governance of each entity relevant to the engagement will be needed at the planning stage and whenever significant judgments are made about threats to integrity, objectivity and independence and the appropriateness of safeguards put in place, for example, when accepting to provide non-audit services.

The section underscores the need for appropriate safeguards. If threats to the integrity or objectivity of the firm are identified, the engagement partner must assess the effectiveness of available safeguards and apply them if they are sufficient to eliminate or reduce the threats.

Lastly, the section emphasises the importance of documentation.

Before accepting or continuing an engagement, the statutory auditor of the firm should assess and document whether it meets the ethical outcomes of the overarching principles and supporting ethical provisions, and complies with the requirements, of this Ethical Standard and whether there are threats to its integrity, objectivity or independence and the safeguards applied to mitigate those threats and why those safeguards mitigate the threats. 

In conclusion, Part B Section 1 of the IAASA Ethical Standard for Auditors (Ireland) 2020, providesstrong comprehensive guidance on the general ethical requirements. It emphasises the importance of understanding and documenting ethical threats, appointing an Ethics Partner, effective communication and implementing appropriate safeguards. 

By adhering to these guidelines, auditors can uphold the integrity of their profession and contribute to the overall trust in the financial system.

The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.

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About the Author

As a member of our Practice Support team, Elaine’s focus is on providing firm’s with assistance and training in the following areas; Anti-Money Laundering, Audit Testing and Walk Through Procedures, Audit Planning and Efficiency, OmniPro Audit Working Paper Demos, Preparing for Monitoring Visits and Post Monitoring Visit follow-ups. Elaine has over 15 years Accountancy Practice experience which has provided her with a wealth of knowledge across all industries and sectors. Elaine is an AITI Chartered Tax Advisor, a Certified Public Accountant and holds a Diploma in Corporate Finance. In her previous roles, Elaine has experienced a number of ACA and ACCA monitoring reviews. This experience has provided Elaine with a great understanding and appreciation for the challenges facing Accountants in practice today. link to

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