Financial Reporting and Ethics - The Institute of Chartered ...

CORPORATE GOVERNANCEThe incoming auditor or adviser should contact his predecessor forinformation as to his nomination and appointment. This is to enablethe member to determine whether, in all the circumstances, it would beproper for him or her to accept the assignment. Even if the previousauditor has been a sole practitioner and is now dead, the incomingauditor should try to obtain necessary information as he may need fromthe latter’s alternate (where appropriate), the administrators ofdeceased’s estate or other sources.If the client does not give his consent for the existing auditor or adviserto discuss his affairs with the proposed successor, the existing auditorshould report that fact to the prospective auditor or adviser who shouldnot accept nomination or appointment.The existing auditor or adviser should respond promptly to thecommunication which he may receive from the prospective auditor oradviser.When the incoming auditor or adviser asks his predecessor forinformation as to the client’s affairs, lack of which might prejudice theclient’s interest, such information should be promptly given. Thereshould be no charge for providing such information, unless there is agood reason to the contrary such as a significant amount of work havingbeen involved.According to the ‘Rules of Professional Conduct for Members’ when thereis no existing auditor or adviser, the procedures of succession and thelaid down ethical considerations apply with equal force and effect tothe previous auditor or adviser.11.11.1 Relationship with Fellow MembersThere are laid down ethical standards which guide a charteredaccountant in the course of performing his professional duties. He hasto relate with other members of the Institute. The various situationsand circumstances which may manifest and under which a charteredaccountant may have to relate to another member of the Institute areas follows:(a)(b)(c)(d)There may be joint engagement as joint auditors, joint receivers,etc.;Fresh nomination or appointment may call for communication withthe predecessors;Special assignment which requires expert or specialist advice oncertain issues may come up;There may be the need for consultancy services from othermembers or member firms; and237