[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-348128-105":59,"doc-detail-348128-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","audit-ethics-question-bank-questions-and-solutions","Audit Ethics Question Bank - Questions and Solutions","","Question bank material on professional ethics for Chartered Accountants, focusing on which fundamental principles are disregarded or violated in common audit scenarios. Covers failures such as not replying to the professional body, knowingly issuing a false certificate, managing threats to independence from financial interests, and identifying fee-related and self-review threats. Includes an engagement acceptance analysis using SA 220/SQC 1 when there are serious integrity and criminal-activity indicators, and an assessment of competence requirements for emerging fin-tech audits.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/audit-ethics-question-bank-questions-and-solutions/348128/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/audit-ethics-question-bank-questions-and-solutions/348128.png","ImageObject",300,407,{"name":92,"@type":93},"Bintang","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-08","2026-09-22",true,{"@type":102,"interactionType":103,"userInteractionCount":39},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What professional ethics principle is disregarded when a CA fails to reply to a letter from the ICAI despite reminders?","Question",{"text":112,"@type":113},"Failure to reply shows lack of courtesy and professional responsibility, disregarding the principle of “Professional behaviour.”","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"Which fundamental principle is violated by knowingly issuing a certificate with misstated original cost of plant and machinery?",{"text":117,"@type":113},"“Integrity” is violated because knowingly providing information believed to be materially false or misleading breaches the integrity requirement.",{"name":119,"@type":110,"acceptedAnswer":120},"How should a proposed auditor respond when independence threats exist due to holding shares in the client?",{"text":121,"@type":113},"The auditor should either desist or eliminate the threat, at least by applying safeguards; in the given situation, selling the shares before accepting the appointment is suggested.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},348128,1791455675,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":39,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},962085564381,"https://ap-avatar.wpscdn.com/davatar_6f874abed73319feea01a86fa6f0fab8","Test Your Understanding  \nQuestion 1  \nCA P. Suryakantam has conducted audit of accounts of an entity for a particular year. ICAI has issued a letter to him relating to certain matters concerning audit. He didn’t even bother to reply to the letter despite reminders. Discuss which fundamental principle governing professional ethics is disregarded by him.  \nSolution  \nFailure to reply to professional body smacks of lack of courtesy and professional responsibility. The principle of “Professional behaviour” is disregarded.  \nQuestion 2  \nA Chartered accountant in practice issued a certificate showing original cost of plant and machinery installed in premises of a client for Rs. 9 crores to save some regulatory fees for his client. However, original cost of plant and machinery was Rs. 15 crore as per records of client. Which fundamental principle governing professional ethics is violated in this case?  \nSolution  \n“Integrity” requires that a professional accountant shall not knowingly be associated with reports, returns, communications or other information where the accountant believes that the information contains a materially false or misleading statement; contains statements or information provided negligently or omits or obscures required information where such omission or obscurity would be misleading.  \nIn the given case, a false certificate is knowingly issued showing misstated original cost of machinery. Therefore, fundamental principle of “integrity” is violated.  \nQuestion 3  \nCA Raman Gupta is offered appointment as auditor of a company. One of his distant uncles held some shares in the same company. Holding of such shares, by a distant relative, is not prohibited under provisions of law nor does it affect his independence. Before he could accept appointment, he received unfortunate news of death of his uncle who had died without any children. He came to know that he was nominee of these shares having substantial value. It landed him in a tricky situation. What should be proper course of action for him?  \nSolution  \nWhen threats to independence exist , the auditor should either desist from the task or eliminate the threat or at the very least, put in place safeguards which reduce the threats to an acceptable level.  \nHolding of shares involves financial interest in the company and is in nature of self-interest threat. He has come to hold shares due to nomination made by his distant relative before accepting the appointment.  \nConsidering above, he should take steps to eliminate the threat by selling shares immediately before accepting appointment. Holding of shares of the same company for which he is offered appointment as auditor constitutes threat to his independence.  \nQuestion 4  \nA Chartered accountant receives about 40% of his total audit fees from a single client. Discuss how it could affect independence of Chartered accountant as auditor of this client. What are such types of threats referred to as?  \nSolution  \nUndue dependence on fees of a client constitutes a threat as there is fear of losing the client. Such threats are referred to as self-interest threats.  \nQuestion 5  \nCA Murli Madhavan provides accounting and book keeping services to a leading NGO engaged in environmental protection work. He is also offered audit of the accounts of NGO. Identify and discuss what kind of threat to independence may be involved in accepting such an engagement.  \nSolution  \nIn this case, Chartered Accountant is already rendering accounting and book keeping services to an NGO. If he accepts audit, he would be involved in reviewing own work. Therefore, the same constitutes “selfreview” threat.  \nQuestion 6  \nCA PK Nair is offered appointment as auditor of a company engaged in providing tourism services. While making due diligence of the proposed client, he comes to know that there have been raids on premises of the company and residences of its directors by National Investigation Agency (NIA) on suspicion of links with terror o","cbCaiogX3OOwJbpV","https://ap.wps.com/l/cbCaiogX3OOwJbpV","pdf",219419,13,"English","# Test Your Understanding\n## Question 1\n## Question 2\n## Question 3\n## Question 4\n## Question 5\n## Question 6\n## Question 7\n# MCQs","[{\"question\":\"What professional ethics principle is disregarded when a CA fails to reply to a letter from the ICAI despite reminders?\",\"answer\":\"Failure to reply shows lack of courtesy and professional responsibility, disregarding the principle of “Professional behaviour.”\"},{\"question\":\"Which fundamental principle is violated by knowingly issuing a certificate with misstated original cost of plant and machinery?\",\"answer\":\"“Integrity” is violated because knowingly providing information believed to be materially false or misleading breaches the integrity requirement.\"},{\"question\":\"How should a proposed auditor respond when independence threats exist due to holding shares in the client?\",\"answer\":\"The auditor should either desist or eliminate the threat, at least by applying safeguards; in the given situation, selling the shares before accepting the appointment is suggested.\"}]","Audit Ethics Question Bank - Questions and Solutions | PDF",1790071237,33]