MIA by laws(1)

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Unformatted text preview: s a court appointed liquidator, provisional liquidator, receiver, receiver and manager, special administrator or persons of like description, of the assurance client within the previous two (2) years. 290.160 The subsequent examples are addressed in the context of the provision of nonassurance services to an assurance client. The potential threats to independence will most frequently arise when a non-assurance service is provided to a financial statement audit client. The financial statements of an entity provide financial information about a broad range of transactions and events that have affected the entity. The subject matter information of other assurance services, however, may be limited in nature. Threats to independence, however, may also arise when a firm provides a non-assurance service related to the subject matter information, of a non-financial statement audit assurance engagement. In such cases, consideration should be given to the significance of the firm’s involvement with the subject matter information, of the engagement, whether any self-review threats are created and whether any threats to independence could be reduced to an acceptable level by application of safeguards, or whether the engagement should be declined. When the non-assurance service is not related to the subject matter information, of the non-financial statement audit assurance engagement, the threats to independence will generally be clearly insignificant. 290.161 (1) The following activities may also create self-review or self-interest threats: (a) Having custody of an assurance client’s assets. (b) Supervising assurance client employees in the performance of their normal recurring activities. (c) Preparing source documents or originating data, in electronic or other form, evidencing the occurrence of a transaction (for 76 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS example, purchase orders, payroll time records, and customer orders). (2) The significance of any threat created should be evaluated and, if the threat is other than clearly insignificant, safeguards should be considered and applied as necessary to eliminate the threat or reduce it to an acceptable level. Such safeguards might include: (a) Making arrangements so that personnel providing such services do not participate in the assurance engagement; (b) Involving an additional professional accountant to advise on the potential impact of the activities on the independence of the firm and the assurance team; or (c) Other relevant safeguards set out in national regulations. 290.162 New developments in business, the evolution of financial markets, rapid changes in information technology, and the consequences for management and control, make it impossible to draw up an all-inclusive list of all situations when providing non-assurance services to an assurance client might create threats to inde...
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This document was uploaded on 09/23/2013.

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