On professional ethics conduct and practice of the

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Unformatted text preview: y applicable in situations when the subject matter information of the assurance engagement is not financial statements. For example, a self-review threat would be created if the firm developed and prepared prospective financial information and subsequently provided assurance on this prospective financial information. Consequently, the firm should evaluate the significance of any self-review threat created by the provision of such services. If the self-review threat is other than clearly insignificant safeguards should be considered and applied as necessary to reduce the threat to an acceptable level. Financial Statement Audit Clients That are Not Listed Entities or Public Interest Entities 290.170 (1) Subject to express prohibitions imposed by any written law and regulatory requirements, the firm, or a network firm, may provide a financial statement audit client that is not a listed entity or public interest entity with accounting and bookkeeping services, including payroll services, of a routine or mechanical nature, provided any self-review 79 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS threat created is reduced to an acceptable level. Examples of such services include: (a) (b) Posting coded transactions to the audit client’s general ledger; (c) Preparing financial statements based on information in the trial balance; and (d) (2) Recording transactions for which the audit client has determined or approved the appropriate account classification; Posting the audit client approved entries to the trial balance. The significance of any threat created should be evaluated and, if the threat is other than clearly insignificant, safeguards should be considered and applied as necessary to reduce the threat to an acceptable level. Such safeguards might include: (a) Making arrangements so such services are not performed by a member of the assurance team; (b) Implementing policies and procedures to prohibit the individual providing such services from making any managerial decisions on behalf of the audit client; (c) Requiring the source data for the accounting entries to be originated by the audit client; (d) Requiring the underlying assumptions to be originated and approved by the audit client; or (e) Obtaining audit client approval for any proposed journal entries or other changes affecting the financial statements. Financial Statement Audit Clients That are Listed Entities or Public Interest Entities 290.171 The provision of accounting and bookkeeping services, including payroll services and the preparation of financial statements or financial information which forms the basis of the financial statements on which the audit report is provided, on behalf of a financial statement audit client that is a listed entity or public interest entity, may impair the independence of the firm or network firm, or at least give the appearance of impairing independe...
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