Revised Code of Ethics in the Phils - 2010

20012 examples of firm wide safeguards in the work

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Unformatted text preview: el having a long association with the assurance client. 200.8 Examples of circumstances that create intimidation threats for a professional accountant in public practice include: • A firm being threatened with dismissal from a client engagement. 149 • • A firm being threatened with litigation by the client. • A firm being pressured to reduce inappropriately the extent of work performed in order to reduce fees. • A professional accountant feeling pressured to agree with the judgment of a client employee because the employee has more expertise on the matter in question. • 200.9 An audit client indicating that it will not award a planned non-assurance contract to the firm if the firm continues to disagree with the client’s accounting treatment for a particular transaction. A professional accountant being informed by a partner of the firm that a planned promotion will not occur unless the accountant agrees with an audit client’s inappropriate accounting treatment. Safeguards that may eliminate or reduce threats to an acceptable level fall into two broad categories: (b) Safeguards created by the profession, legislation or regulation; and (b) Safeguards in the work environment. Examples of safeguards created by the profession, legislation or regulation are described in paragraph 100.14 of Part A of this Code. 200.10 A professional accountant in public practice shall exercise judgment to determine how best to deal with threats that are not at an acceptable level, whether by applying safeguards to eliminate the threat or reduce it to an acceptable level or by terminating or declining the relevant engagement. In exercising this judgment, a professional accountant in public practice shall consider whether a reasonable and informed third party, weighing all the specific facts and circumstances available to the professional accountant at that time, would be likely to conclude that the threats would be eliminated or reduced to an acceptable level by the application of safeguards, such that compliance with the fundamental principles is not compromised. This consideration will be affected by matters such as the significance o...
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