Revised Code of Ethics in the Phils - 2010

290163 whether an activity is a management

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Unformatted text preview: ubject to auditprocedures and (b) any threats that are created by the provision of suchservices are eliminated or reduced to an acceptable level by the applicationof safeguards. 290.161 A non-assurance service provided to an audit client does not compromisethe firm’s independence when the client becomes a public interest entity if: (a) The previous non-assurance service complies with the provisions ofthis section that relate to audit clients that are not public interestentities; (b) Services that are not permitted under this section for audit clients thatare public interest entities are terminated before or as soon aspracticable after the client becomes a public interest entity; and 64 (c) The firm applies safeguards when necessary to eliminate or reduce to anacceptable level any threats to independence arising from the service. Management Responsibilities 290.162 Management of an entity performs many activities in managing the entity inthe best interests of stakeholders of the entity. It is not possible to specifyevery activity that is a management responsibility. However, managementresponsibilities involve leading and directing an entity, including makingsignificant decisions regarding the acquisition, deployment and control ofhuman, financial, physical and intangible resources. 290.163 Whether an activity is a management responsibility depends on thecircumstances and requires the exercise of judgment. Examples of activitiesthat would generally be considered a management responsibility include: • Setting policies and strategic direction; • Directing and taking responsibility for the actions of the entity’semployees; • Authorizing transactions; • Deciding which recommendations of the firm or other third parties toimplement; • Taking responsibility for the preparation and fair presentation of thefinancial statements in accordance with the applicable financialreporting framework; and • Taking responsibility for designing, implementing and maintaininginternal control. 290.164 Activities that are routine and administrative, or involve matters that areinsignificant, generally are deemed not to be a management responsibility.For example, executing an insignificant transaction...
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