Of goods and services from an assurance client by the

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Unformatted text preview: [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS 290.136 When an immediate family member of a member of the assurance team is a director, an officer or an employee of the assurance client in a position to exert direct and significant influence over the subject matter information of the assurance engagement, or was in such a position during any period covered by the engagement, the threats to independence can only be reduced to an acceptable level by removing the individual from the assurance team. The closeness of the relationship is such that no other safeguard could reduce the threat to independence to an acceptable level. If application of this safeguard is not used, the only course of action is to withdraw from the assurance engagement. For example, in the case of an audit of financial statements, if the spouse of a member of the assurance team is an employee in a position to exert direct and significant influence over the preparation of the audit client’s accounting records or financial statements, the threat to independence could only be reduced to an acceptable level by removing the individual from the assurance team. 290.137 (1) When an immediate family member of a member the assurance team is an employee in a position to exert direct and significant influence over the subject matter of the engagement, threats to independence may be created. The significance of the threats will depend on factors such as: (a) (b) (2) The position the immediate family member holds with the client; and The role of the professional on the assurance team. 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) Where possible, structuring the responsibilities of the assurance team so that the professional does not deal with matters that are within the responsibility of the immediate family member; or (c) 290.138 (1) Removing the individual from the assurance team; Policies and procedures to empower staff to communicate to senior levels within the firm any issue of independence and objectivity that concerns them. When a close family member of a member of the assurance team is a director, an officer, or an employee of the assurance client in a position to exert direct and significant influence over the subject matter information of the assurance engagement, threats to independence may be created. The significance of the threats will depend on factors such as: 68 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) (b) (2) The position the close family member holds with the client; and The role of the professional on the assurance team. The significance of the threat should be evaluated and, if the threat is other than clearly insignificant, safeguards sho...
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This document was uploaded on 09/23/2013.

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