General Principles of a Financial Statement Audit

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 The auditor should comply with the Code of Professional Ethics for Certified Public Accountants-(PROMULGATED by BOARD OF ACCOUNTANCY; APPROVED by PROFESSIONAL REGULATION COMMISSION)

Ethical Principles
Independence Integrity Objectivity Professional Competence and Due Care Confidentiality Professional behavior Technical Standards

Independence
Must be se and should be seen to be free of any interest whatever its actual effect as being incompatible with integrity and objectivity Implication: Without Independence, the auditors opinion is suspect, hence the credibility of financial report is questionable.

Integrity
Straightforward, honest, and sincere in the approach to professional work Implication: Implies the existence of the observance of accepted standards of honesty which must underlie professional decisions and actions.

Objectivity
Be fair and must not allow prejudice, conflict of interest and bias to override. Implications An and impartial attitude is not maintained.This significantly affects auditors independence.

Professional Competence and Due Care

Duty to maintain professional knowledge and skill to a level required based on up-to- date tice, development in practice, legislation and techniques. Implication Auditors have duties to (1) to maintain level of competence throughout professional career, and (2)To do work that they are competent

Confidentiality
Must not disclose any such information to a third party without specific authority, unless there is a legal professional duty to do so. Implication Need to appreciate that loyalty is owed to affected stakeholders-the profession, public, client/employer and individual.

Professional Behavior
Manners consistent with the goal of profession and responsibility to the public Implication Disciplinary procedures might be impose

Technical Standards
Carry out professional work in accordance with technical standards related to work. Implications Non-compliance may cause the audit expectation gaps

Scope of Financial Statement Audit

Audit procedures necessary to achieve the objective of an audit, in accordance with the following: Philippine Standard on auditing Relevant professional bodies Legislations and regulations

Demand For Financial Statement Audit

Complexity of transactions Remoteness of Information Biases and Motives of the Provider Consequencess

Complexity of transactions Remoteness of Information

Information risk
Biases and motives of the provider
Consequences

Information Risk
Risk that the information used to access business risk is not accurate or misleading.