CODE OF ETHICS

Cases & Issues of Unjustified Removal of Auditors:

Independence of Auditors

Unjustified Removal of Auditors

Section 224 Appointment & Remuneration of Auditor Section 224A Auditor not to appointed except with the approval of the company by special resolution in certain cases. Section 225 Provisions as to resolutions for appointing or removing auditors Clause (8)&(9) Part I of Schedule I of CA Act,1949

Relationship with Other Members in Practice

Communication with outgoing Auditor in case of change of auditor Compliance with the requirement of section 224, 224A & 225 of the Companies Act, 1956

Communication with outgoing Auditor in case of change of auditor

Non-compliance of the Provisions of Section 224, 224A & 225 of the Companies act, 1956 Undercutting of Fees Non-payment of undisputed audit fees Issuance of a qualified report

Compliance with the requirement of Sec. 224, 224A & 225 of the Companies Act
To ensure that the outgoing is properly removed That the guidelines prescribed by the Institute have been complied with To ensure that the incoming auditor is properly appointed.

INDEPENDENCE

Independence of Mind Independence in Appearance

Independence Should be Exhibited in

Objectivity Integrity Professional Services

Threats of Independence

Self - Interest Threat Advocacy Threat Familiarity Threat Intimidation Threat Self Review Threat

Safeguards
Safeguards Created by the Profession, Legislation or Regulation Safeguards within the Assurance Client Safeguards within the Firm/s own Systems & Procedures

Safeguards Created by the Profession, Legislation or Regulation

Education, Training & Experience Continuing Education Requirements Professional Standards & Disciplinary Processes. External Review of Firms Quality Control System. Legislation Governing Independence

Safeguards within the Assurance Client

Competent Employees to make Managerial Decisions. Policies and Procedures for fair Financial Reporting. Internal Procedures Corporate Governance Structure

Safeguards within the Firms own Systems & Procedures

Firm Leadership Policies & Procedures for Quality Control Documented Independence regarding Identification of threats and Application of Safeguards. Disciplinary Mechanism

Objective & Structure

Identifying Threats to Independence Evaluating the Threats Applying appropriate Safeguards to eliminate or reduce the threats.

Public Interest Public Consists of

Clients Credit Granters Government Employers Employees Investors Business Financial Community

Objectives
Credibility Professionalism Quality of Services Confidence

Fundamental Principles
Integrity Objectivity Professional Competence and Due Care Confidentiality Professional Behavior Technical Standards.