Revised Code of Ethics in the Phils - 2010

125 threats to independence are created when a member

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Unformatted text preview: f the assurance client, may create selfinterest, familiarity or intimidation threats. The existence and significance of any threats will depend on a number of factors, including the individual’s responsibilities on the assurance team, the role of the family member or other individual within the client, and the closeness of the relationship. 291.122 When an immediate family member of a member of the assurance team is: (a) A director or officer of the assurance client, or 220 (b) An employee in a position to exert significant influence over the subject matter information of the assurance engagement, or was in such a position during any period covered by the engagement or the subject matter information, 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 safeguards could reduce the threat to an acceptable level. Accordingly, no individual who has such a relationship shall be a member of the assurance team. 291.123 Threats to independence are created when an immediate family member of a member of the assurance team is an employee in a position to exert significant influence over the subject matter of the engagement. The significance of the threats will depend on factors such as: • The position held by the immediate family member; and • The role of the professional on the assurance team. The significance of the threat shall be evaluated and safeguards applied when necessary to eliminate the threat or reduce it to an acceptable level. Examples of such safeguards include: • Removing the individual from the assurance team; or • 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. 291.124 Threats to independence are created when a close family member of a member of the assurance team is: • A director or officer of the assurance client; or • An employee in a position to exert significant influence over the subject matter informatio...
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