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Unformatted text preview: such an audit client.
290.109 The office in which the engagement partner practices in connection with the audit engagement
is not necessarily the office to which that partner is assigned. Accordingly, when the
engagement partner is located in a different office from that of the other members of the audit
team, professional judgment shall be used to determine in which office the partner practices in
connection with that engagement.
290.110 If other partners and managerial employees who provide non-audit services to the audit client,
except those whose involvement is minimal, or their immediate family members, hold a direct
financial interest or a material indirect financial interest in the audit client, the self-interest
threat created would be so significant that no safeguards could reduce the threat to an
acceptable level. Accordingly, neither such personnel nor their immediate family members
shall hold any such financial interests in such an audit client.
290.111 Despite paragraphs 290.108 and 290.110, the holding of a financial interest in an audit client by
an immediate family member of:
(a) A partner located in the office in which the engagement partner practices in connection
with the audit engagement, or (b) A partner or managerial employee who provides non-audit services to the audit client, is
deemed not to compromise independence if the financial interest is received as a result of
the immediate family member’s employment rights (for example, through pension or
share option plans) and, when necessary, safeguards are applied to eliminate any threat to
independence or reduce it to an acceptable level. However, when the immediate family member has or obtains the right to dispose of the
financial interest or, in the case of a stock option, the right to exercise the option, the financial
interest shall be disposed of or forfeited as soon as practicable.
290.112 A self-interest threat may be created if the firm or a member of the audit team, or a member of
that individual’s immediate family, has a...
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This document was uploaded on 04/03/2014.
- Spring '14