An evaluation of the role of the person holding the

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Unformatted text preview: ispose of the indirect financial interest in total or dispose of a sufficient amount of it so that the remaining interest is no longer material prior to the individual becoming a member of the assurance team; or (c) Remove the member of the assurance team from the assurance engagement. 59 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS 290.107 (1) If a member of the assurance team, or their immediate family member receives, by way of, for example, an inheritance, gift or, as a result of a merger, a direct financial interest or a material indirect financial interest in the assurance client, a self-interest threat would be created. The following safeguards should be applied to eliminate the threat or reduce it to an acceptable level: (a) (b) (2) Disposing of the financial interest at the earliest practical date; or Removing the member of the assurance team from the assurance engagement. During the period prior to disposal of the financial interest or the removal of the individual from the assurance team, consideration should be given to whether additional safeguards are necessary to reduce the threat to an acceptable level. Such safeguards might include: (a) Discussing the matter with those charged with governance, such as the audit committee; or (b) Involving an additional professional accountant to review the work done, or otherwise advise as necessary. 290.108 When a member of the assurance team knows that his or her close family member has a direct financial interest or a material indirect financial interest in the assurance client, a self-interest threat may be created. In evaluating the significance of any threat, consideration should be given to the nature of the relationship between the member of the assurance team and the close family member and the materiality of the financial interest. Once the significance of the threat has been evaluated, safeguards should be considered and applied as necessary. Such safeguards might include: (a) The close family member disposing of all or a sufficient portion of the financial interest at the earliest practical date; (b) Discussing the matter with those charged with governance, such as the audit committee; (c) Involving an additional professional accountant who did not take part in the assurance engagement to review the work done by the member of the assurance team with the close family relationship or otherwise advise as necessary; or (d) Removing the individual from the assurance engagement. 290.109 When a firm or a member of the assurance team holds a direct financial interest or a material indirect financial interest in the assurance client as a trustee, a self-interest threat may be created by the possible influence of the trust over the assurance client. Accordingly, such an interest should only be held when: 60 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute...
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This document was uploaded on 09/23/2013.

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