January 2007 part i by laws on professional ethics

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Unformatted text preview: Safeguards that should be applied in all circumstances to reduce any threats to an acceptable level include: 86 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS (a) (b) (3) The staff providing the assistance should not be given audit responsibility for any function or activity that they performed or supervised during their temporary staff assignment; and The financial statement audit client should acknowledge its responsibility for directing and supervising the activities of firm, or network firm, personnel. Where a financial statement audit client is a listed entity or public interest entity the lending of staff by a firm or network firm is prohibited. Provision of Litigation Support Services to Financial Statement Audit Clients 290.193 Litigation support services may include activities such as acting as an expert witness, calculating estimated damages or other amounts that might become receivable or payable as the result of litigation or other legal dispute, and assistance with document management and retrieval in relation to a dispute or litigation. 290.194 (1) A self-review threat may be created when the litigation support services provided to a financial statement audit client include the estimation of the possible outcome and thereby affects the amounts or disclosures to be reflected in the financial statements. The significance of any threat created will depend upon factors such as: (a) (b) The degree of subjectivity inherent in the matter concerned; and (c) (2) The materiality of the amounts involved; The nature of the engagement. The firm, or network firm, should evaluate the significance of any threat created and, if the threat is other than clearly insignificant, safeguards should be considered and applied as necessary to eliminate the threat or reduce it to an acceptable level. Such safeguards might include: (a) Policies and procedures to prohibit individuals assisting the audit client from making managerial decisions on behalf of the client; (b) Using professionals who are not members of the assurance team to perform the service; or (c) The involvement of others, such as independent experts. 87 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS 290.195 If the role undertaken by the firm or network firm involved making managerial decisions on behalf of the financial statement audit client, the threats created could not be reduced to an acceptable level by the application of any safeguard. Therefore, the firm or network firm should not perform this type of service for a financial statement audit client. Provision of Dispute Resolution Services to Financial Statement Audit Clients 290.196 [This section is intentionally kept blank] 290.197 [This section is intentionally kept blank] 290.198 [This section is intentionally kept...
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