PROFESSIONAL BEHAVIOUR - SUBSECTION 115

By: AUVENGERS

MIA BY-LAWS

A professional accountant shall comply with the principle of professional

behavior, which requires an accountant to:

(a) Comply with relevant laws and regulations;

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Financial Reporting Standards (FRS) and Malaysian Financial Reporting Standards (MFRS)

(b) Behave in a manner consistent with the profession’s responsibility to

act in the public interest in all professional activities and business

relationships; and

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This principle means that professional accountants should always act in a way that is good for the public, not just for themselves or their clients.

(c) Avoid any conduct that the accountant knows or should know might

discredit the profession.

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1. Engaging in unethical practice

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• lack of Professionalism

When undertaking marketing or promotional activities, a professional accountant shall not bring the profession into disrepute. A professional accountant shall be honest and truthful and shall not make:

• In auditing, "exaggerated claims for the services offered by, or the qualifications or experience of, the accountant" means making false or misleading statements about what services an accountant or auditing firm can provide, their qualifications, or their experience. This can mislead clients and is considered unethical and potentially illegal. It's crucial for accountants to provide accurate information to maintain trust and integrity in financial reporting.

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Exaggerated claims for the services offered by, or the qualifications or experience of, the accountant.

When undertaking marketing or promotional activities, a professional accountant shall not bring the profession into disrepute. A professional accountant shall be honest and truthful and shall not make:

• In auditing, "disparaging references or unsubstantiated comparisons to the work of others" means making negative comments about the work of other auditors or firms without valid evidence or unfairly comparing one's own work to theirs without clear justification. Such behavior is considered unprofessional and can harm professional reputation and trust within the industry.

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Disparaging references or unsubstantiated comparisons to the work of others.

If a professional accountant is unsure about the appropriateness of their advertising or marketing, they should seek guidance from their professional accounting organization. This helps them adhere to ethical standards and avoid potential violations.

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If a professional accountant is unsure about the appropriateness of their advertising or marketing, they should seek guidance from their professional accounting organization. This helps them adhere to ethical standards and avoid potential violations.

AUDITING PROCEDURES AND TEST OF CONTROL

By: AUVENGERS

1. Audit procedures to use�

The detailed instruction that explains the audit evidence to be obtained during the audit. It is common to spell out this procedure in sufficiently specific terms so an auditor may follow these instructions during the audit

Example:

Examine the cash disbursements journal in the accounting system and compare the payee, name, amount, and date with online information provided  by the bank about checks processed for the account

2. Sample size

• Auditors can vary the sample size from one to all the items in the population being tested. 
• The goal of determining the appropriate sample size is to obtain sufficient and reliable evidence to support the auditor's conclusions about the FS.

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Example:

To verify cash disbursements, suppose 6,600 checks are recorded, the auditor might select a sample size of 50 checks. The decision of how many times to test must be made by the auditor for each audit procedure. 

3. Items to select 

• The auditor must decide which items in the population to test. 
• The specific sample size can vary depending on several factors including auditor's risk assessment, the desired level of confidence and the characteristic of the population being tested

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Example:

Method:

1. Select a week & examine the first 50 check
2. Select the 50 checks with the largest amount
3. Select the check randomly
4. Select those checks that the auditor thinks are more likely to be in error

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3. Timing 

• The timing of audit procedures can therefore vary from early in the accounting period to long after it has ended. 
• Normally, the client want the audit to be completed 1 to 3 month after financial year end.
• Influenced by when the effective and when the audit staff is available.

Example:

1. Inventory observation
1. minimizing the risk of significant discrepancies between the recorded inventory and the actual physical count.

2) Account receivable

• allows the auditor to verify the existence and amount of outstanding receivables as of the year-end

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TEST OF CONTROL

By: AUVENGERS

Test of control

To determine whether these internal controls are sufficient to detect or prevent risks of material misstatements. 

Ensure that financial statements are accurate and reliable.

Performed by auditors to assess the effectiveness of an organization's internal controls. An essential part of the audit process, and help auditors gain confidence in the control environment.

Test of control

To determine whether these internal controls are sufficient to detect or prevent risks of material misstatements. 

Ensure that financial statements are accurate and reliable.

Evidence :

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• Make inquiries of appropriate client personnel.
• Examine documents, records, and reports.
• observe control-related activities.
• Reperform client procedures.

Application Test of Control in Auditing

Understanding the internal control environment

Identifying key controls

Selecting the sample

Assessing control risk

Evidence :

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• Make inquiries of appropriate client personnel.
• Examine documents, records, and reports.
• observe control-related activities.
• Reperform client procedures.

Application Test of Control in Auditing

Identifying key controls

Understanding the internal control environment

Documenting the results

Performing the control test

Evaluating the results

Assessing control risk

Selecting the sample

Application Test of Control in Auditing

Forming an audit opinion

Assessing control risk

Adjusting audit procedures

Performing the control test

Evaluating the results

Documenting the results

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