Also create self interest and advocacy threats if the

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Unformatted text preview: ent and the members of the assurance team must be characterized by complete candor and full disclosure regarding all aspects of a client’s business operations. The firm and the client’s management may be placed in adversarial positions by litigation, affecting management’s willingness to make complete disclosures and the firm may face a self-interest threat. The significance of the threat created will depend upon such factors as: (a) The materiality of the litigation; (b) The nature of the assurance engagement; and (c) Whether the litigation relates to a prior assurance engagement. 93 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS (2) Once the significance of the threat has been evaluated the following safeguards should be applied, if necessary, to reduce the threats to an acceptable level: (a) (b) If the litigation involves a member of the assurance team, removing that individual from the assurance team; or (c) (3) Disclosing to the audit committee, or others governance, the extent and nature of the litigation; charged with Involving an additional professional accountant in the firm who was not a member of the assurance team to review the work done or otherwise advise as necessary. If such safeguards do not reduce the threat to an appropriate level, the only appropriate action is to withdraw from, or refuse to accept, the assurance engagement. 94 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS PART C: PROFESSIONAL ACCOUNTANTS IN BUSINESS Section 300 Introduction Section 310 Potential Conflicts Section 320 Preparation and Reporting of Information Section 330 Acting with Sufficient Expertise Section 340 Financial Interests Section 350 Inducements 95 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS Section 300 Introduction Introduction 300.1 Part C illustrates how the conceptual framework contained in Part A is to be applied by professional accountants in business. 300.2 Investors, creditors, employers and other sectors of the business community, as well as governments and the public at large, all may rely on the work of professional accountants in business. Professional accountants in business may be solely or jointly responsible for the preparation and reporting of financial and other information, which both their employing organizations and third parties may rely on. They may also be responsible for providing effective financial management and competent advice on a variety of business-related matters. 300.3 A professional accountant in business may be a salaried employee, a partner, director (whether executive or non-executive), an owner manager, a volunteer or another working for one or more employing organization. The...
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This document was uploaded on 09/23/2013.

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