To independence could be reduced to an acceptable

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Unformatted text preview: pendence and of the different safeguards that might eliminate these threats or reduce them to an acceptable level. In general, however, a firm may provide services beyond the assurance engagement provided any threats to independence have been reduced to an acceptable level. 290.163 The following safeguards may be particularly relevant in reducing to an acceptable level threats created by the provision of non-assurance services to assurance clients: (a) Policies and procedures to prohibit professional staff from making management decisions for the assurance client, or assuming responsibility for such decisions. (b) Discussing independence issues related to the provision of non-assurance services with those charged with governance, such as the audit committee. (c) Policies within the assurance client regarding the oversight responsibility for provision of non-assurance services by the firm. (d) Involving an additional professional accountant to advise on the potential impact of the non-assurance engagement on the independence of the member of the assurance team and the firm. (e) Involving an additional professional accountant outside of the firm to provide assurance on a discrete aspect of the assurance engagement. (f) Obtaining the assurance client’s acknowledgement of responsibility for the results of the work performed by the firm. 77 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS (g) Disclosing to those charged with governance, such as the audit committee, the nature and extent of fees charged. (h) Making arrangements so that personnel providing non-assurance services do not participate in the assurance engagement. 290.164 Before the firm accepts an engagement to provide a non-assurance service to an assurance client, consideration should be given to whether the provision of such a service would create a threat to independence. In situations when a threat created is other than clearly insignificant, the non-assurance engagement should be declined unless appropriate safeguards can be applied to eliminate the threat or reduce it to an acceptable level. 290.165 The provision of certain non-assurance services to financial statement audit clients may create threats to independence so significant that no safeguard could eliminate the threat or reduce it to an acceptable level. However, the provision of such services to a related entity, division or discrete financial statement item of such clients may be permissible when any threats to the firm’s independence have been reduced to an acceptable level by arrangements for that related entity, division or discrete financial statement item to be audited by another firm or when another firm re-performs the non-assurance service to the extent necessary to enable it to take responsibility for that service. Preparing Accounting Records and Financial Statements 290.166 Assisting a financial statement audit...
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This document was uploaded on 09/23/2013.

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