Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p26
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 76703–79671

need to be aware of those differences and comply with the more stringent provisions, unless prohibited by law or regulation.

A24.         Various provisions of the relevant ethical requirements may apply only to individuals in the context of the performance of engagements and not the firm itself. For example:

           * Part 2 of the APESB Code applies to individuals who are members in public practice when they are performing professional activities pursuant to their relationship with the firm, whether as a contractor, employee or owner, and may be relevant in the context of the performance of engagements.

           * Certain requirements in Parts 3 and 4 of the APESB Code also apply to individuals who are members in public practice when they are performing professional activities for clients.

Compliance with such relevant ethical requirements by individuals may need to be addressed by the firm's system of quality management.
Example of relevant ethical requirements that are applicable only to individuals and not the firm, and which relate to the performance of engagements

Part 2 of the APESB Code addresses pressure to breach the fundamental principles, and includes requirements that an individual shall not:

      * Allow pressure from others to result in a breach of compliance with the fundamental principles; or

      * Place pressure on others that the accountant knows, or has reason to believe, would result in the other individuals breaching the fundamental principles.

For example, circumstances may arise when, in performing an engagement, an individual considers that the engagement partner or another senior member of the engagement team has pressured them to breach the fundamental principles.

Response (Ref: Para. 16(u))

A25.         Policies are implemented through the actions of personnel and other individuals whose actions are subject to the policies (including engagement teams), or through their restraint from taking actions that would conflict with the firm's policies.

A26.         Procedures may be mandated, through formal documentation or other communications, or may result from behaviours that are not mandated but are rather conditioned by the firm's culture. Procedures may be enforced through the actions permitted by IT applications, or other aspects of the firm's IT environment.

A27.         If the firm uses individuals external to the firm in the system of quality management or in the performance of engagements, different policies or procedures may need to be designed by the firm to address the actions of the individuals. ASA 220[9] provides guidance when different policies or procedures may need to be designed by the firm to address the actions of individuals external to the firm in the context of an audit of a financial report.

Service Provider (Ref: Para. 16(v))

A28.         Service providers include component auditors from other firms not within the firm's network.

Applying, and