Business Ethics, Professionalism and Regulatory Compliance
What the exam tests
Business Ethics, Professionalism and Regulatory Compliance tests the ICAN Code, independence, confidentiality, NOCLAR and Nigerian regulatory duties. Case questions often place you under pressure from a client or employer.
Core rules
- IESBA/ICAN conceptual framework: identify threats (self-interest, self-review, advocacy, familiarity, intimidation), evaluate, then eliminate or safeguard.
- Independence: no direct financial interest, no close family ties, no undue dependence on one client; rotate engagement partners where required.
- Confidentiality is not absolute: disclose where required by law, for legal proceedings, or to comply with AML/CFT reporting.
- NOCLAR: if you become aware of non-compliance, escalate internally, consider external reporting and document advice.
- Regulatory: FRC oversight, SEC rules for public companies, CBN rules for banks, FIRS filing duties; auditors communicate reportable matters to those charged with governance and, where required, regulators.
Worked example
An audit senior owns 500 shares in the audit client. This is a direct financial interest and creates a self-interest threat. Selling the shares before the engagement starts can eliminate the threat; holding them while working on the audit cannot be safeguarded by review. If a partner is pressured to ignore a ₦20m unrecorded liability, that is intimidation; the partner should escalate to the ethics partner and document the dispute. Reason: independence is judged by appearance as well as fact.
Traps
Saying “immaterial” cures an independence breach; letting confidentiality block a money-laundering report; accepting management’s representation without evidence; and treating a code of conduct as a public-relations document.