Question Tag: Accounting Profession

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  • 5 Marks

AA – Nov 2020 – L2 – Q1a – Audit Failure and Expectation Gap

Discuss factors that account for the audit expectation gap.

In recent years, some well‐publicized corporate failures and its subsequent implication of the reporting auditors have highlighted the audit expectation gap. Public misperceptions are a major cause of the threat of legal challenges facing the accounting profession. One of the key challenges facing assurance providers is understanding and tackling the expectation gap in assurance.

Required:
Discuss what factors account for the expectation gap.
(5 marks)

The expectation gap results from the public’s wrong perception of what they think auditors should do as opposed to what the auditor actually does in accordance with legal and professional requirements. Factors that account for the expectation gap are:

  • Performance gap
  • Some auditors may perform below the expectations of users.
  • Liability gap
  • Many users do not know to whom the auditor owes a responsibility and therefore may want to sue the auditor when they are not supposed to do so.

(5 marks)

  • 10 Marks

AA – April 2022 – L2 – Q2b – Institutional Regulation and Standard-Setting

Identifies the functions of ICAG and discusses the effects of its dual role in promoting the study of accountancy and regulating the profession.

b) The function of the Institute of Chartered Accountants, Ghana (ICAG) has become a subject of discussion in recent times after the passage of the Institute of Chartered Accountants, Ghana Act, 2020 (Act 1058). The thrust of the matter is the dual role of the Institute – to promote the study of accountancy and regulate the accountancy profession and practice in the country.

i) Identify FOUR (4) functions of ICAG. (4 marks)
ii) Discuss the effects of the dual role exercised by ICAG. (6 marks)

i) Functions of ICAG:

  1. Ensuring that audits are performed only by ‘fit and proper persons’ who act with professional integrity by offering high standard examinations.
  2. Requiring that members carry out their audit work in accordance with appropriate technical standards, setting standards for members.
  3. Ensuring auditors remain technically competent and up to date with modern practices through offering training and continuous education programs.
  4. Maintaining a list for members and investigating complaints about members, sanctioning them when necessary.

ii) Discussion of the dual role exercised by ICAG:

  • The self-regulation aspect has sparked debate, with concerns that the institute cannot effectively sanction its members, suggesting that this function be handed to a neutral body.
  • In other jurisdictions, governments appoint bodies to deal with complaints against professional members, as it is believed that small professional communities may not rigorously discipline their members.
  • Proponents argue that if professional bodies can maintain ethical standards, they can sanction members appropriately. However, this would require strong internal structures, including sufficient funding for regulation.
  • 3 Marks

BCL – May 2020 – L2 – Q3d – Governance and Ethical Issues Relating to Business

Identify three codes of ethics for accountants in Ghana.

Code of Ethics are drawn up to be followed by all the company’s structures and professionals. It serves as a guide to professional conduct and guarantees concerns about efficiency, competitiveness, and profitability.

Required:

Identify THREE (3) codes of ethics for Accountants in Ghana.
(3 marks)

Three codes of ethics for accountants in Ghana include:

  1. Integrity: Accountants must be straightforward and honest in all professional and business relationships.
  2. Confidentiality: Accountants must respect the confidentiality of information acquired as a result of professional and business relationships and should 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.
  3. Objectivity: Accountants must not allow bias, conflict of interest, or undue influence of others to override professional or business judgments.

 

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