Unformatted text preview: cceptable level, the professional accountant shall document the nature of the
threat and the rationale for the conclusion. Engagement Period
290.30 Independence from the audit client is required both during the engagement period and the period
covered by the financial statements. The engagement period starts when the audit team begins to
perform audit services. The engagement period ends when the audit report is issued. When the
engagement is of a recurring nature, it ends at the later of the notification by either party that the
professional relationship has terminated or the issuance of the final audit report.
290.31 When an entity becomes an audit client during or after the period covered by the financial
statements on which the firm will express an opinion, the firm shall determine whether any
threats to independence are created by:
(a) Financial or business relationships with the audit client during or after the period covered
by the financial statements but before accepting the audit engagement; or (b) Previous services provided to the audit client. 290.32 If a non-assurance service was provided to the audit client during or after the period covered by
the financial statements but before the audit team begins to perform audit services and the service
would not be permitted during the period of the audit engagement, the firm shall evaluate any
threat to independence created by the service. If a threat is not at an acceptable level, the audit
engagement shall only be accepted if safeguards are applied to eliminate any threats or reduce
them to an acceptable level. Examples of such safeguards include:
• Not including personnel who provided the non-assurance service as members of the audit
team; • Having a professional accountant review the audit and non-assurance work as appropriate; or • Engaging another firm to evaluate the results of the non-assurance service or having another
firm re-perform the non-assurance service to the extent necessary to enable it to take
responsibility for the service. Mergers a...
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This document was uploaded on 04/03/2014.
- Spring '14