AUD339 TUTORIAL Q&A – MIA BY-LAWS

Question 1 (AUD339-Q1Sept2015)

A. The Chartered Accountants in Malaysia are required to comply with the various
guidelines stipulated in the MIA By-Laws (On Professional Ethics, Conduct and Practice)
issued by the Council of the Malaysian Institute of Accountants. Besides, the Chartered
Accountants that provide auditing and assurance services have to ensure strict
adherence to the prescribed standards.
Required:
a. State the professional standards relating to financial reporting and independent
auditing respectively that are applicable in Malaysia.

b. Briefly explain TWO (2) reasons why a Chartered Accountant is required to comply
with the MIA By-Laws (On Professional Ethics, Conduct and Practice

c. The MIA By-Laws (On Professional Ethics, Conduct and Practice) require its members
to uphold the principle of objectivity.
Explain the meaning of objectivity in relation to the external auditing function.

B. A professional accountant’s responsibility is not exclusively to satisfy the needs of an

individual client or employer. Acting in the public interest, a professional accountant
should observe and comply with the ethical requirements of the MIA By-Laws (On
Professional Ethics, Conduct and Practice).
Required:
a. Explain any TWO (2) circumstances where an auditor may disclose confidential
information of the client.

b. In each of the following circumstances, determine whether Haziq Hazim & Hasif,
Accountants have violated the MIA By-Laws (On Professional Ethics, Conduct and
Practice) or not. Justify your answer.

i During an Annual General Meeting of Thayyib Bhd, Haziq explained to the

shareholders the reasons why a qualified opinion was issued on the financial
statements of the company. The management argued that Haziq should not
have mentioned the reason as it involves disclosure of confidential
information without obtaining prior approval from the management.
ii During the financial year ended 31 December 2014, Hazim provided
bookkeeping and auditing services to Waja Bhd, an audit client. The
management of the company is satisfied with the outstanding services
provided by Hazim.

iii Hasif is the partner in-charge of the audit of Mell Bhd. Based on an agreement
made with the management, an audit fee of RM90,000 would be charged if
no material misstatement is highlighted in the auditor’s report. On the other
hand, a discount of 50 percent of the fee would be granted if the auditor
issued a modified report.

iv In recognition of the good business relationship with the auditor, Aisya Sdn
Bhd, an audit client offered a business loan of RM200,000 to Haziq, Hazim &
Hasif, Chartered Accountants. The auditor accepted the offer.
Question 2 (AUD339-Q1 March 2016)

A. Malaysian Institute of Accountants (MIA) requires all of its members to comply with the MIA
By-Laws (On Professional Ethics, Conduct and Practice), which includes compliance on
fundamental ethical principles.
Required:
a. State any TWO (2) fundamental principles a professional accountant needs to comply
with.
b. Section 150 of the MIA By-Laws states that:
“Professional accountants should be honest and truthful and should not make
exaggerated claims for the services they are able to offer, the qualifications they possess,
or experience they have gained or make disparaging references or unsubstantiated
comparisons to the work of others”.
Briefly explain any TWO (2) examples of specific potential clients where the auditors are
permitted to promote their services.
c. Explain any TWO (2) main purposes of MIA By-Laws.

B. The auditor’s dependence on clients for fees makes it difficult for auditors to maintain their
professional independence. There is always a risk of losing the audit fee in the event of a dispute
with management of the clients over some aspect of the published financial report.
Required:
a. Define the meaning of independence in relation to the following concepts:
i. Independence of mind
ii. Independence in appearance

b. In each of the following circumstances, determine whether Ali, Abu & Ahmad (AAA),
Chartered Accountants have violated the MIA By-Laws or not. Discuss the arguments for
your answer.
i. AAA introduced Jefry & Co to provide consultancy services to one of AAA clients
which belongs to Ali’s brother.
ii. Ahmad has financial interest in a debt collection agency, AHM Debt
Management (ADM). During the year Ahmad also provides some confidential
information of their clients to ADM.
iii. AAA has been appointed as the external auditor for Damai Holdings, a company
which belongs to Abu’s father in-law. Abu’s wife does not hold any position or
shares in Damai Holdings or AAA.

iv. AAA recently appointed an IT manager to provide consultancy on IT services.

AAA advertised the service in several local IT magazines claiming its expertise in
this area.

Question 3 (AUD339-Q1 October 2016)

A. A strong accounting profession is seen as a crucial component of the capital market system.
The accounting profession as a whole plays a key role in enhancing investor confidence and
upholding public interest.
Required:
a. State any TWO (2) fundamental principles that should be complied by a professional
accountant.
b. Discuss briefly any TWO (2) ways to help safeguard the auditor’s independence.
 c. Explain any TWO (2) matters that should be taken into consideration when deciding
to charge the professional fees.

B. The purpose of ethical pronouncements is to encourage a pattern of behaviour in

professionals person, and also to provide a practical and enforceable test of the
appropriateness of the individual’s behaviour.
Required:
a. Explain with reason the possible threats that may arise from the following situation:
i. An audit client indicates that a planned non-assurance contract will not be
awarded to the firm if the firm continues to disagree with the client’s accounting
treatment for a particular transaction.
ii. An audit firm enters into a contingent fee arrangement related to an
assurance engagement with client.
b. In each of the following circumstances, discuss whether the auditor has violated the
MIA By-Laws (On Professional Ethics, Conduct and Practice) or not.

i. Haikal has just graduated from local university with Bachelor in Accounting.
His cousin owns an accounting firm in Senai and he plans to set up a branch
in Bandar Hilir, Melaka. Therefore, he has appointed Haikal as the branch
manager at the new branch.
ii. Ali, a partner of Ali, Ahmad & Co. bought a significant amount of shares in
Amanda Sdn Bhd, an audit client of Ali, Ahmad & Co.
iii. Irina, Arman & Co. disclosed the confidential information of its client in the
court of law to defend its firm from an action of negligence.
iv. An audit firm accepted an offer from a client to audit a company from an
agricultural industry. Since the audit firm has just been established for three
months, the audit firm does not have the required expertise.

Question 4 (AUD339-Q1 March 2017)

A. Every member of the Malaysian Institute of Accountants is required to comply with the MIA
By-Laws (On Professional Ethics, Conduct and Practice) issued by the institute.
Required:
a. State the importance of the MIA By-Laws (On Professional Ethics, Conduct and Practice) in
the auditing profession.
b. The fundamental principle of the MIA By-Laws (On Professional Ethics, Conduct and
Practice) stipulates that a professional accountant in public practice may provide only
those services that he is competent to perform.
Explain briefly the term ‘competence’.
c. Explain the possible implication if an auditor is not independent from his audit client.

B. The MIA By-Laws (On Professional Ethics, Conduct and Practice) require the auditor to use his
professional judgement in identifying the threats to his independence and evaluating the
significance of the threats identified.
Required:
a. Explain any TWO (2) categories of threats.
b. In each of the following circumstances, discuss whether Rahim & Chia, Chartered
Accountants has violated the MIA By-Laws (On Professional Ethics, Conduct and
Practice) or not.
i Rahim has an outstanding term loan of RM110,000 from Setiaraya Bank Bhd.
The loan was previously granted based on the normal lending policy of the
 bank and no special treatment was given to Rahim. Recently, Rahim & Chia
has accepted the appointment as the external auditor of Setiaraya Bank Bhd.
Chia will be a partner-incharge.
ii Rahim & Chia provided accounting and tax services to Bahtera Sdn Bhd
starting from 1 August 2014 to 31 December 2015. The management of the
company proposed that Rahim & Chia be appointed to audit the company’s
financial statements for the year ended 31 March 2016. The appointment was
later formalised during the company’s Annual General Meeting.
iii Rahim & Chia was appointed as the auditor of Kemunting Sdn Bhd for the year
ended 31 December 2015 but it is not reappointed as auditor for the next
financial year. Immediately after the company’s annual general meeting in
2016, the management of Kemunting Sdn Bhd offered Rahim & Chia to
provide tax consultancy services to the company. Rahim & Chia accepted the
offer.
iv Chia bought a second hand car worth RM150,000 from Amanda Motor, an
audit client. In recognition of the outstanding audit services provided by
Rahim & Chia, the company offered a 50 percent discount off the market price
to Rahim & Chia. Chia accepted the discount.

Question 5 (AUD339-Q1 Jan 2018)

A. As professional accountants, we need to practice ethical conduct in our profession to gain

public confidence. Malaysian Institute of Accountants (MIA) members are required to observe
and adhere with MIA By-Laws (On Professional Ethics, Conduct and Practice) issued by the
Institute.
Required:
a. List any TWO (2) fundamental principles a professional accountant is required to
comply with.
b. Explain briefly the term ‘confidentiality’ as stipulated under the MIA By-Laws.
c. Discuss the statement below:
“I am a member of MIA. Am I bound by the ethical guidelines of the Institute?”

B. Ethical behaviour is necessary for a society to function in an orderly manner. The need for
ethics in society is sufficiently important that many commonly held ethical values are
incorporated into laws.
Required:

a. Explain any TWO (2) rules for Advertising, Marketing and Promotions as incorporated
in the MIA By-Laws (On Professional Ethics, Conduct and Practice).
b. Aryan is an audit partner of the accounting firm, Azam & Aryan Associates. Aryan
has been appointed as the partner-in-charge for Mukmin Fresh Bhd.
For each of the following independent situations, discuss whether the auditor has
violated or not violated the MIA By-Laws (On Professional Ethics, Conduct and
Practice).
i. The general manager of Mukmin Fresh Bhd wants Aryan to help them in
preparing interim financial statements to be presented to Berjaya Bank for the
purpose of applying financial assistance.
ii. During the course of the annual audit, Aryan was offered twenty (20) free
tickets to Sunway Lagoon Theme Park which worth RM4,000 in recognition of
his good work. Aryan accepted the tickets.
 iii. In completing the audit, Aryan found material misstatement of net income on
the previous year’s tax return. The management of Mukmin Fresh Bhd refused
to take corrective action. Aryan informed the Inland Revenue Board regarding
this matter.
iv. Mukmin Fresh Bhd traditionally gives hampers during festive seasons to Azam
& Aryan Associates. This year, Aryan was sponsored with a family dinner
worth RM3,000 in a 5-star hotel due to the company’s good performance.

Question 6 (AUD339-Q1 June 2018)

A. The MIA By-Laws (On Professional Ethics, Conduct and Practice) issued by the Council of the
Malaysian Institute of Accountants aim to ensure that all professional accountants meet the
expectation of the public in carrying out their duties. Among the fundamental principles that
are covered within the By-Laws include the requirements on integrity, professional competence
and due care as well as objectivity.
Required:
a. Define the meaning of integrity.
b. Distinguish the difference between the term ‘competence’ and ‘due care’.
c. Explain any TWO (2) possible implications if the external auditor is not independent
from his/her audit client.

B. With reference to the guidelines of the MIA By-Laws (On Professional Ethics, Conduct and
Practice), the fee charged by a professional accountant for every engagement should fairly
reflect the value of work performed.
Required:
a. Explain any TWO (2) factors that should be considered by an auditor in deciding the
amount of audit fee to be charged in an audit engagement.
b. Discuss whether Nazura & Associates has violated the MIA By-Laws (On Professional
Ethics, Conduct and Practice) or not. Support your answer with appropriate reasons.
i Nazura provides accounting and taxation services to Mybi Bhd since its
incorporation three years ago and the company is satisfied with the quality of
services provided by Nazura. Arising from resignation of the company’s
existing auditor, Nazura was recently appointed as the company’s external
auditor.
ii Nazura turned down the offer to be reappointed as the auditor of Herpa Bhd
for the current year without providing any specific reason to the management
of the company.
iii Nazura accepted the offer to be the auditor of Yourma Bhd without
communicating with the existing auditor in order to expedite the appointment
process. Nazura does not have any relationship with the management of the
company.
iv In responding to an inquiry by the investigation committee of the Malaysian
Institute of Accountants (MIA), Nazura disclosed certain confidential
information of Ourbro Bhd, an audit client without seeking prior approval
from the company.

Question 7 (AUD339-Q1 Dec 2018)

A. The ethical pronouncements of the professional bodies are an attempt to codify principles that
provide useful guidance to professional accountants in the conduct of their business. They
 include certain assumptions about moral principles and standards of conduct, which should be
observed by professional accountants.
Required:
a. State any TWO (2) fundamental principles of ethics as stated in the MIA By- Laws (On
Professional Ethics, Conduct and Practice).
b. Explain briefly any TWO (2) types of threats that may compromise the auditor’s
independence.
c. Determine any TWO (2) situations that may allow the auditor to disclose the confidential
information to the third party.

B. One of the standards importances to the accounting profession in Malaysia is the code of
professional conduct. This is referred to ethics code for accountant known as the MIA By-Laws
(On Professional Ethics, Conduct and Practice). Failure to follow the principles and rules of the
ethics code could result in the loss of the right to work as a professional accountant.
Required:
a. Explain any TWO (2) conditions for public accountant to involve in advertising, marketing
and promotional.
b. Discuss whether each of the following situations has violated the MIA By-Laws (On
Professional Ethics, Conduct and Practice) or not. Support your answer with appropriate
reasons.
i. Hannah & Associates has just established their audit firm for three months with
minimum experience in auditing field. Recently, they accepted an offer to audit
an agriculture company although they have no specialty in the area.
ii. Aiman is an auditor for one of the big audit firms in Malaysia. After working hour,
he enjoys dinner with few friends and discuss several issues encountered during
the audit of Faber Bhd.
iii. Ikmal, the auditor for Ikmal & Associates refused to allow his brother, a newly
graduated accounting student to become one of the audit partners in Ikmal &
Associates.
iv. To retain her existing client, Farah, the auditor from Farah & Associates has
made an offer to reduce the audit fees as much as 50% from previous
year’s fees without any valid reason.
SUGGESTED SOLUTION – AUD339 TUTORIAL – MIA BY LAWS

Question 1 (AUD339-Q1 Sept. 2015)

A.
a. The professional standards relating to financial reporting and independent auditing
respectively that are applicable in Malaysia:
i. Malaysian Financial Reporting Standards (MFRS)
ii. Malaysian Approved Standards on Auditing (MASA)

b. TWO (2) reasons why a Chartered Accountant is required to comply with the MIA by-
laws (on Professional Ethics, Conduct & Practice) :
i. To ensure that the Chartered Accountant exhibits the highest standards of
ethics, professionalism and professional conduct that is expected of the
accounting profession.
ii. To ensure that the public has trust on the quality & reliability of services
provided by the Chartered Accountant to the public.

c. The term objectivity in auditing means the external auditor should perform the audit
independently without any element of bias, conflict of interest or undue influence of
the client.

B. a. 1. Permission is sought from the client.

2. There is a legal duty to disclose the information.
3. There is a professional responsibility to disclose the information.

b.
v Not violate. The auditor has a legal right or duty to disclose the confidential
information to the shareholders. Permission from the client is not necessary.
vi Violate. By providing bookkeeping services to an audit client, the auditor’s
objectivity is impaired and there is a self-review threat.
vii Violate. The audit fee charged on a contingent basis might cause the auditor
to be biased in issuing his opinion.
viii Violate. By accepting a business loan from an audit client, the auditor’s
objectivity is impaired and there is a self-interest threat.

Question 2 (AUD339-Q1 March 2016)

A. MIA By-Laws
a. TWO (2) fundamental principles a professional accountant is required to comply with.
• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
• Professional behaviour

b. TWO (2) examples of specific potential clients where the auditors are permitted to
promote their services.
• Solicit business through mail or electronic or other means to existing client ,
 close associates and other practising members
• Promote seminars or during seminar
• Promote to other professional advisers
Or any acceptable answers

c. TWO (2) main purposes of MIA By-Laws.

• Inculcate sound professional practice and for the prevention of illegal dishonourable
practice by members
• To be observed by auditors as a standard of conduct in their daily professional life
• It is important for the auditor to gain public confidence in the quality of their service
Or any acceptable answers

B. a.
i. Independence of mind: The state of mind that permit the expression of a conclusion
without being affected by influences that compromise professional judgement,
allowing an individual to act with integrity, and exercise objectivity and professional
scepticism.
ii. Independence in appearance: The avoidance of facts and circumstances that are so
significant that a reasonable and informed third party, having knowledge of all
relevant information, including safeguards applied, would reasonably conclude a
firm’s, or a member of the assurance team’s, integrity, objectivity or professional
scepticism had been compromised.

b. i. Not violated.
Ali has no financial interest in Jefry & Co.
ii. Violated.
Ahmad has violated confidentiality principle in MIA By-Laws because he has provided
some information to ADM.
iii. Not violated.
Abu and his immediate family member have no financial interest in Damai Holdings
and Abu does not involve in the assurance service.
iv. Violated.
AAA have advertised in mass media and claimed expertise in IT services which violate
MIA By-Laws on advertising, marketing and promotion.

Question 3 (AUD339-Q1 Oct. 2016)

A.
d. TWO (2) fundamental principles that should be complied by a professional
accountant:
• Integrity
• Objectivity
• Professional Competence and Due
• Confidentiality
• Professional behaviour

e. TWO (2) ways to help safeguard the auditor’s independence:

• Adhere to the professional code of ethics relating to integrity, objectivity
consistency, etc
• Prohibition of acts and behavior that impair independence, for example, avoid
holding of financial interest and official position in client’s company
• Educational, training and experience requirements for entry into the profession
 • Continuing education requirement
• Monitoring and disciplinary processes
• External and peer review and quality control standards and processes

f. TWO (2) matters that should be taken into consideration when deciding to charge the
professional fees:
• The skill and knowledge required for the type of work involved
• The level of training and experience of the persons necessarily engaged in the
work
• The time necessarily spent by each person engaged in the works
• The degree of responsibility and urgency that the work entails

B. a. The possible threat that may arise from the following situation:
iii. Intimidation threat – By forced cancellation of contract by the client to withdraw
auditor from conducting subsequent audit thus indirectly affecting auditor’s
revenues.
iv. Self-interest threat – The auditor has a direct financial interest or material indirect
financial interest in the audit client

b. Determine whether the auditor has violated the MIA By-Laws (On Professional Ethics, Conduct
and Practice) or not.
No. Violation/Non Violation Reasons
i. Violation Method of practice – A member in public
practice should not allow any person who is not
a member of the Institute to practice in
partnership with him or her as a chartered
accountant/licensed accountant or to practice
in his or her name as a chartered
accountant/licensed accountant.
ii. Violation Independence – Has direct or indirect material
financial interest in the client’s company e.g.
buying shares, high audit fees, etc.
iii. Non-Violation Confidentiality – A member is allowed to
disclose confidential information of a client
without consent if compel by the court of law.
iv. Violation Professional competence and due care –
Members shall not undertake professional
work which he is not competent to perform
unless the member obtains such advice and
assistant as will enable him to carry out the
work completely.
Question 4 (AUD339-Q1 March 2017)
A.
a. The MIA By-laws are important to ensure that the auditors practise good moral principles,
values or acceptable behavior in performing the audit and to ensure that the public has trust
on the auditing profession. The By-laws would also ensure that auditing is performed by the
auditors who have a high level of integrity.
b. Competence means the auditor should be knowledgeable in performing the audit i.e., by
possessing a recognised professional qualification and the relevant working experience that
would enable him to perform the audit proficiently
c. If the auditor is not independent from his audit client, he might be biased by not issuing his
opinion objectively. Besides, the public might not trust the opinion issued by the auditor who
lacks independence from his audit client.

B.
a. 1. Self-interest threat
-the threat that a financial or other interest will inappropriately influence the
professional accountant judgment or behavior.
2. Self-review threat
-the threat that a professional accountant will not appropriately evaluate the results of a
previous judgment made, or activity or service performed by the professional accountant,
or by another individual within the professional accountant’s firm or employing
organization, on which the accountant will rely when forming a judgment as part of
performing a current activity or providing a current service.
3. Advocacy threat
-the threat that a professional accountant will promote a client’s or employer’s position
to the point that the professional accountant’s objectivity is compromised..
4. Familiarity threat
-the threat that due to a long or close relationship with a client or employer, a professional
accountant will be too sympathetic to their interests or too accepting of their work.
5. Intimidation threat
-the threat that a professional accountant will be deterred from acting objectively because
of actual or perceived pressures, including attempts to exercise undue influence over the
professional accountant.
b.
i. Not violate because the loan was granted to the audit partner from a financial
institution and no special treatment was given to the borrower.
ii. Violate because the there is a self-review threat and the auditor might be biased when
auditing the financial statements (and thus the accounting records) that they were
involved with before.
iii. Not violate because the appointment as auditor was made before the accounting firm
provides the tax consultancy services.
iv. Violate because there is a self-interest threat and the auditor might be biased by
receiving a huge amount of discount on the car price.

Question 5 (AUD339-Q1 Jan 2018)

A. a. TWO (2) fundamentals principles are:

i. integrity
ii. objectivity
iii. professional competence and due care
iv. confidentiality
v. professional behavior

b. Confidentiality is auditor needs to respect the confidentiality of information acquired as a

result of professional and business relationships and, therefore, not disclose any such
information to third parties without proper and specific authority, unless there is a legal
 or professional right or duty to disclose, nor use the information for the personal
advantage of the professional accountant or third parties.

c. As a member of MIA, I am bound by all the ethical guidelines of the institute because:

i.
To ensure that the Chartered Accountant (CA) exhibits the highest standards of ethics,
professionalism and professional conduct that is expected of the accounting
profession.
ii. To ensure that the public has trust on the quality and reliability of services provided
by the CA to the public.
B. a. Any TWO (2) rules for Advertising, Marketing and Promotions as incorporated in the MIA By-
Laws.

• Material should be professionally dignified and in good taste and carried out in
accordance with the relevant legislation
• Information must be honest and truthful
• Should not contain exaggerated claims for the services they are able to offer, the
qualifications they possess or experience they have gained
• Should not make disparaging reference or unsubstantiated comparisons to the work
of others.
b.
i.Violate.
Self-review threat will arise when Aryan, as a company auditor prepared the interim
financial statements because auditor’s professional judgment and objectivity will be
impaired.
ii. Violate.
The auditor is not independent to the audit client. The acceptance of offer will create
self-interest threat or threat to independence in issuing audit opinion. He might be
biased in performing the audit.
iii. Non-violate.
The action done by auditor is in accordance to confidentiality principle because this is
a professional duty of auditor to report unethical action done by client for the legal
purpose.
iv. Violate.
The independence of auditor will be impaired when he accepted the offer from his
client and auditor’s objectivity and integrity will be tarnished.
Question 6 (AUD339-Q1 June 2018)

A. a. Integrity is the attitude of being straightforward and honest in professional and

business relationships.
b. Competence means a person has attained and maintained his professional
qualification whereas due care means a person acts carefully and diligently in carrying
out a particular assignment.
c. If the external auditor is not independent from his audit client, he might not be able
to perform the audit objectively. A biased opinion might be issued and the users might
be reluctant to rely on his opinion.

B. a. TWO (2) factors that should be considered by an auditor in determining the audit fee:
• The level of skill and knowledge required for the work: High fee if the
engagement is complex.
 • The level of training and experience of the persons involved: High fee if the
engagement requires experience auditor.
• The time spent by each member: High fee if the time spent is long.
• The degree of responsibility and urgency of the work: High fee if the deadline
is very tight.
b.
i. Violate. The acceptance of appointment might cause a self-review threat.
Nazura might be biased in issuing her opinion.

ii. Not violate. There is no requirement for the auditor to provide reason for
turning down reappointment.

iii. Violate. It is a requirement of the MIA by-laws that the proposed auditor
should communicate with the existing auditor prior to accepting appointment
as an auditor.

iv. Not violate. The auditor may disclose confidential information of the client
without seeking permission when there is a professional duty to disclose such
information.

Question 7 (AUD339-Q1 Dec 2018)

A.
a. Any TWO (2) fundamental principles of ethics as stated in the MIA By-Laws
(On Professional Ethics, Conduct and Practice).
• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
• Professional behavior

b. Any TWO (2) types of threat that may compromise the auditor’s independence.
• Self - interest threat
The auditor has a direct financial interest or material indirect financial interest in
the audit client.
• Self- review threat
The auditor is also involved in the preparation of accounting records and financial
statements of the audit client.
• Familiarity threat
The audit firm’s long association with the audit client may be over influencing the
auditor’s professional judgement with regard to the audit.
• Intimidation threat
Occurs when member of the audit team may be deterred from acting objectively
and exercising professional scepticism by threats, actual or perceived from the
directors, officers or employees of an audit client.
• Advocacy threat
When members promote a position or opinion on behalf of a client to the point
that subsequent objectivity may be compromised.
 c. Any TWO (2) situations for auditors to disclose the confidential information to the
third party.
• For the purpose of discharge his duties to his client.
• In accordance with the provision of any written law or where disclosure is
compelled by the process of law.
• Where disclosure is reasonably necessary to protect the member’s interest.
B.
c. Any TWO (2) conditions for public accountant to involve in advertising, marketing and
promotional.

• Material should be professionally dignified and in good taste and carried out in
accordance with the relevant legislation.
• Information must be honest and truthful.
• Should not exaggerated claims for the services they are able to offer, the
qualifications they possess or experience they have gained
• Should not make disparaging reference or unsubstantiated comparisons to the work
of others.

d. Discuss whether the following situations have violated the MIA By-Laws (On Professional
Ethics, Conduct and Practice) or not. Support your answer with appropriate reasons.

No. Violated/Not Reason

violated
i. Violated Competence and due care – The auditor should not
accept the offer since the firm did not have the
specialty/experience in the area.

ii. Violated Confidentiality – A member is prohibited from using

confidential information acquired in the course of the
professional work for personal advantage, except
with the consent of the client.

iii. Not violated Method of practice – A member in public practice

should not allow any person who is not a member of
the Institute to practice in partnership with him or her
as a chartered accountant/licensed accountant or to
practice in his or her name as a chartered
accountant/licensed accountant.

iv. Violated Fees – Professional fees charged should be a fair

reflection of the value of the work performed for the
client.