One of the sub-topics relates to APES 110 Code of Ethics for Professional
Accountants. The code sets out the main ethical pronouncement for members
of professional accounting bodies in Australia, which are, CPA Australia,
Chartered Accountants Australia and New Zealand (CAANZ) and Institute of
Public Accountants (IPA). Section 100.5 of APES 110 sets out five fundamental
principles of professional ethics that apply to all members.
Assume that you have been working as an auditor for the past three years. You
are currently an audit assistant in RJ and Associates. You managed to complete
a professional accounting program with one of the professional accounting
bodies early this year. Upon completion of the program, you applied to be a full
member of the accounting body. Last week, you received a letter from the
accounting body advising that your application for a full membership had been
successful. You told the good news to your colleagues in RJ and Associates. The
firm organises a gathering to celebrate your success. In the speech during the
gathering, the Managing Partner of RJ and Associates emphasises that “As a
member of professional accounting body, it is important that we adhere to the
code of professional ethics. For example, we must always upheld the
professional competence and due care principles as well as professional
behaviour principles”.

Professional competence and due care is one of the fundamental principles of professional ethics as stated in APES110.

1.Discuss why it is important for an auditor to adhere to this principle when working on an audit engagement. You need to provide two justifications in your discussion. You also need to provide specific examples to support your argument. (The example can be the hypothetical examples or real world examples)

2.Explain the difference between professional behaviour and professional competence and due care principles.