Revised Code of Ethics in the Phils - 2010

290133 when an inadvertent violation of this section

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Unformatted text preview: n (a) a partner or employee of the firm who is not a member of the audit team and (b) a director or officer of the audit client or an employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion. Partners and employees of the firm who are aware of such relationships shall consult in accordance with firm policies and procedures. The existence and significance of any threat will depend on factors such as: • The nature of the relationship between the partner or employee of the firm and the director or officer or employee of the client; • The interaction of the partner or employee of the firm with the audit team; • The position of the partner or employee within the firm; and • The position the individual holds with the client. The significance of any 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: • Structuring the partner’s or employee’s responsibilities to reduce any potential influence over the audit engagement; or • Having a professional accountant review the relevant audit work performed. 290.133 When an inadvertent violation of this section as it relates to family and personal relationships occurs, it is deemed not to compromise independence if: (a) The firm has established policies and procedures that require prompt notification to the firm of any breaches resulting from changes in the employment status of their immediate or close family members or other personal relationships that create threats to independence; (b) The inadvertent violation relates to an immediate family member of a member of the audit team becoming a director or officer of the audit client or being in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion, and the relevant professional is removed from the audit team; and (c) The firm applies other safeguards when necessary to reduce any remaining threat to an acceptable level. Examples of such safeguards include: (i) Having a professional accountant review the work of the member of the audit team; or 57 (ii) Excluding the relevant professional from any significant decision-making concerning the engagement. The firm shall determine whether to discuss the matter with those ch...
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This document was uploaded on 04/03/2014.

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