12-22-2009, 05:33 PM
Dear
I have not came across the term you have mentioned. You may go through the Code of Ethics of IFAC revised during the current year.
The Code of Ethics allows auditors to provide fullest and fair information on an aspect to the management (TO APPRISE THEM ON AN IMPORTANT ISSUE) and leave the management to take its own decision and make its own judgments. Auditors are prohibited to influence the judgements and decisions of the management in any case. However, code is lenient on immatreial and insignificant administrative issues. I refer you to clauses 290.159 to 290.170 of the revised code of ethics issued by IFAC.
Where the auditor can be asked by its client for technical advice on some accounting or allied issues (prescribed in Code), still, the judgment and decision has to be made by the management and auditors' advice must not influence it.
Auditor must not get involved in desiging and implementation of systems, procedures and controls of its audit client.
In my view auditor, if find reasons to do so, can in his management letter object on out-dated information system, can suggest the management to explore new opportunities to improve the system and can indicate the best possible alternatives. But he has to leave explicitly on management to make inquiries, judgments and take decision as to what would be most suitable for their business, provided they wish to follow auditors' suggestion to improve the system.
In no circumstances, auditor should involve in decision making/selection process or devloping of IT system for its client or in implementation of any such system.
So the thin lines have to be carefully observed and followed.
Hope you are clarified.
Regards,
KAMRAN.
I have not came across the term you have mentioned. You may go through the Code of Ethics of IFAC revised during the current year.
The Code of Ethics allows auditors to provide fullest and fair information on an aspect to the management (TO APPRISE THEM ON AN IMPORTANT ISSUE) and leave the management to take its own decision and make its own judgments. Auditors are prohibited to influence the judgements and decisions of the management in any case. However, code is lenient on immatreial and insignificant administrative issues. I refer you to clauses 290.159 to 290.170 of the revised code of ethics issued by IFAC.
Where the auditor can be asked by its client for technical advice on some accounting or allied issues (prescribed in Code), still, the judgment and decision has to be made by the management and auditors' advice must not influence it.
Auditor must not get involved in desiging and implementation of systems, procedures and controls of its audit client.
In my view auditor, if find reasons to do so, can in his management letter object on out-dated information system, can suggest the management to explore new opportunities to improve the system and can indicate the best possible alternatives. But he has to leave explicitly on management to make inquiries, judgments and take decision as to what would be most suitable for their business, provided they wish to follow auditors' suggestion to improve the system.
In no circumstances, auditor should involve in decision making/selection process or devloping of IT system for its client or in implementation of any such system.
So the thin lines have to be carefully observed and followed.
Hope you are clarified.
Regards,
KAMRAN.
