Be considered and applied as necessary to eliminate

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Unformatted text preview: rwriting of an assurance client’s shares is not compatible with providing assurance services. Moreover, committing the assurance client to the terms of a transaction or consummating a transaction on behalf of the client would create a threat to independence so significant no safeguard could reduce the threat to an acceptable level. In the case of a financial statement audit client the provision of those corporate finance services referred to above by a firm or a network firm would create a threat to independence so significant no safeguard could reduce the threat to an acceptable level. 290.205 Other corporate finance services may create advocacy or self-review threats; however, safeguards may be available to reduce these threats to an acceptable level. Examples of such services include assisting a client in developing 89 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS corporate strategies, assisting in identifying or introducing a client to possible sources of capital that meet the client specifications or criteria, and providing structuring advice and assisting a client in analyzing the accounting effects of proposed transactions. Safeguards that should be considered include: (a) Policies and procedures to prohibit individuals assisting the assurance client from making managerial decisions on behalf of the client; (b) Using professionals who are not members of the assurance team to provide the services; and (c) Ensuring the firm does not commit the assurance client to the terms of any transaction or consummate a transaction on behalf of the client. Fees and Pricing Fees–Relative Size 290.206 (1) When the total fees generated by an assurance client represent a large proportion of a firm’s total fees, the dependence on that client or client group and concern about the possibility of losing the client may create a self-interest threat. The significance of the threat will depend upon factors such as: (a) (b) (2) The structure of the firm; and Whether the firm is well established or newly created. The significance of the threat 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) (b) Taking steps to reduce dependency on the client; (c) External quality control reviews; and (d) 290.206A (1) Discussing the extent and nature of fees charged with the audit committee, or others charged with governance; Consulting a third party, such as a professional regulatory body or another professional accountant. In all cases involving listed entities or public interest entities, if the total fees (arising from assurance and non-assurance services) generated by one assurance client or its related entities exceed 15% of the firm’s total fees in each year over two consecutive financial periods, finan...
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