Unformatted text preview: • Making arrangements so that personnel providing such services do not participate in the
audit engagement. 290.177 Certain valuations do not involve a significant degree of subjectivity. This is likely the case
where the underlying assumptions are either established by law or regulation, or are widely
accepted and when the techniques and methodologies to be used are based on generally
accepted standards or prescribed by law or regulation. In such circumstances, the results of a
valuation performed by two or more parties are not likely to be materially different.
290.178 If a firm is requested to perform a valuation to assist an audit client with its tax reporting
obligations or for tax planning purposes and the results of the valuation will not have a direct
effect on the financial statements, the provisions included in paragraph 290.191 apply.
Audit clients that are not public interest entities
290.179 In the case of an audit client that is not a public interest entity, if the valuation service has a
material effect on the financial statements on which the firm will express an opinion and the
valuation involves a significant degree of subjectivity, no safeguards could reduce the self- 189 review threat to an acceptable level. Accordingly a firm shall not provide such a valuation
service to an audit client.
Audit clients that are public interest entities
290.180 A firm shall not provide valuation services to an audit client that is a public interest entity if the
valuations would have a material effect, separately or in the aggregate, on the financial
statements on which the firm will express an opinion.
290.181 Taxation services comprise a broad range of services, including:
• Tax return preparation;
• Tax calculations for the purpose of preparing the accounting entries; • Tax planning and other tax advisory services; and • Assistance in the resolution of tax disputes. While taxation services provided by a firm to an audit client are addressed separately under
each of these broad headings; in practice, these activities are often interrelated.
290.182 Performing certain tax services creates self-review and advocacy threats. The existence and
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This document was uploaded on 04/03/2014.
- Spring '14