Ensuring that a the audit client acknowledges its

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Unformatted text preview: terest entity (1) The firm or network firm should not accept an engagement to design, provide or implement financial information technology services where: (a) (b) (2) the systems concerned would be important to any significant part of the accounting system or to the production of the financial statements; or the engagement would lead to the firm’s or network firm’s personnel taking decisions or making judgments which are properly the responsibility of management in the normal course of their employment. Other than systems that are important to any significant part of the accounting system or to the production of the financial statements, and provided that the management has the requisite expertise, an engagement to design, provide or implement financial information technology systems for a financial statement audit client may be 85 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS accepted, provided that a knowledgeable member of management or senior employee of the financial statement audit client with the requisite expertise has been designated by the financial statement audit client as having responsibility for overseeing the non-audit services and provided that appropriate safeguards are applied. (3) Formal acceptance by management of the systems designed and installed by the firm or network firm is unlikely to be an effective safeguard when, in substance, the firm or network firm has been retained by management as experts and the firm or network firm makes important decisions in relation to the design or implementation of systems of internal control and financial reporting. (4) Additional safeguards include ensuring that – (a) the financial information technology projects undertaken by the firm or network firm are performed by partners and staff who have no involvement in the financial statement audit engagement; (b) the financial statement audit is reviewed by an independent partner to ensure that the financial information technology work performed has been properly and effectively assessed in the context of the financial statement audit engagement. Temporary Staff Assignments to Financial Statement Audit Clients 290.192 (1) The lending of staff by a firm, or network firm, to a financial statement audit client may create a self-review threat when the individual is in a position to influence the preparation of a client’s accounts or financial statements. In practice, such assistance may be given (particularly in emergency situations) but only on the understanding that the firm’s or network firm’s personnel will not be involved in: (a) (b) Approving or signing agreements or other similar documents; or (c) (2) Making management decisions; Exercising discretionary authority to commit the client. Each situation should be carefully analyzed to identify whether any threats are created and whether appropriate safeguards should be implemented....
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This document was uploaded on 09/23/2013.

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