On professional ethics conduct and practice of the

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Unformatted text preview: nce. Accordingly, no safeguard other than the prohibition of such services, could reduce the threat created to an acceptable level. Therefore, a firm or a network firm should not, provide such services to a listed entity or public interest entity that is a financial statement audit client. 290.172 [This section is intentionally kept blank] 80 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS 290.173 [This section is intentionally kept blank] Valuation Services 290.174 A valuation comprises the making of assumptions with regard to future developments, the application of certain methodologies and techniques, and the combination of both in order to compute a certain value, or range of values, for an asset, a liability or for a business as a whole. 290.175 A self-review threat may be created when a firm or network firm performs a valuation for a financial statement audit client that is to be incorporated into the client’s financial statements. 290.176 If the valuation service involves the valuation of matters material to the financial statements and the valuation involves a significant degree of subjectivity, the self-review threat created could not be reduced to an acceptable level by the application of any safeguard. Accordingly, such valuation services should not be provided or, alternatively, the only course of action would be to withdraw from the financial statement audit engagement. 290.177 (1) Performing valuation services for a financial statement audit client that are neither separately, nor in the aggregate, material to the financial statements, or that do not involve a significant degree of subjectivity, may create a self-review threat that could be reduced to an acceptable level by the application of safeguards. Such safeguards might include: (a) (b) Confirming with the audit client their understanding of the underlying assumptions of the valuation and the methodology to be used and obtaining approval for their use; (c) Obtaining the audit client’s acknowledgement of responsibility for the results of the work performed by the firm; and (d) (2) Involving an additional professional accountant who was not a member of the assurance team to review the work done or otherwise advise as necessary; Making arrangements so that personnel providing such services do not participate in the audit engagement. In determining whether the above safeguards would be effective, consideration should be given to the following matters: 81 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) The extent of the audit client’s knowledge, experience and ability to evaluate the issues concerned, and the extent of their involvement in determining and approving significant matters of judgment. (b) The degree to which established methodologies and professional gui...
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This document was uploaded on 09/23/2013.

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