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Good morning Sir
I have a doubt with respect to the safeguards.On page 25 – Safeguards apply at three levels:
1) Safeguards in the work environment,
2) Safeguards that increase the risk of detection, and
3) Specific safeguards to deal with particular cases. If the auditor is unable to implement fully adequate safeguards, the auditor must not carry out the work.I have understood the 1st & 3rd one .However i m not able to understand the second one.
Shouldn’t it be the safeguards that decrease the detection risk or Safeguards that decreases the risk of non detection?
That’s a very good question and something I hadn’t spotted before. It is actually correct according to reliable pronouncements of several professional bodies.
What it is saying is that if doing something is ethically “wrong” – the greater the risk of being found out – the greater the deterrent. So, for example, if someone is contemplating unethical behaviour in the knowledge that if a colleague were to find out, that colleague had a duty to report it (or face disciplinary proceedings for failure to report it), they might think again.
If I m getting it right from your example does that means applying safeguard that increase the chances that if as an auditor I do something unethical ,it gets easily detected by someone else?
It’s partly that – so if an audit partner knows that their audit will be subject to a review (e.g. an EQCR) the review acts as a safeguard.
But it’s not just about “ease” of detection – but whether the person who detects it will do anything about it. So in the previous example I gave you – they are more likely to do something about it if they will be penalised themselves for not doing so.Don’t get too tied up with this – ethics questions will look for safeguards to be applied to specific assignments – rather than ask about types of safeguards in generic terms.
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