Professional Ethics and Deontology - the Loi 10-01 framework
This domain tests the ethical framework of the Algerian accounting professions as set by Loi 10-01 of 29 June 2010 and the codes of the Ordre des Experts Comptables and the CNCC. Questions are situational: a fee arrangement, a conflict, a request from a client, and you must identify the threat and the appropriate response.
The fundamental principles
- Integrity: be straightforward and honest in all professional and business relationships.
- Objectivity and independence: no bias, no conflict of interest, and for the commissaire aux comptes, independence both in fact and in appearance.
- Competence and due care: accept only engagements within your competence, and keep it current.
- Confidentiality: information acquired through the engagement is not disclosed without authority, and the duty survives the end of the engagement.
- Professional behaviour: comply with the law and avoid conduct that discredits the profession.
Applying the framework
- Identify threats: self-interest, self-review, advocacy, familiarity, intimidation. Then apply safeguards or decline the engagement; where no safeguard is sufficient, decline.
- Independence barriers: no financial interest in the client, no loans or guarantees, no contingent fees, no close family in a key finance position, no long association without rotation or review safeguards.
- Incompatibilities: the statutory auditor may not perform bookkeeping, expert-comptable or management functions for the audited entity.
Worked example
A company offers its auditor a fee of 2,000,000 DA plus 15% of any tax saving obtained following the audit's recommendations. The contingency creates a self-interest threat and, because the auditor would be promoting a result it must later certify, an advocacy and self-review threat. No safeguard neutralises a fee dependent on the outcome of the auditor's own work; the fee must be agreed in advance, on a basis independent of results. The engagement should be declined or restructured.
Traps
- Treating confidentiality as absolute - the law and the courts can override it.
- Believing independence concerns only the auditor's state of mind and not appearances.
- Accepting an engagement without a written lettre de mission defining scope and fees.
- Confusing the roles of expert-comptable (adviser, may keep the books) and commissaire aux comptes (certifier, may not).
- Ignoring the disciplinary ladder, from admonition and blâme through suspension to radiation.