Revised Code of Ethics in the Phils - 2010

290205 depending on the degree of reliance that will

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Unformatted text preview: client’s needs is notsignificant; and (d) Evaluating and making recommendations with respect to a systemdesigned, implemented or operated by another service provider or theclient. Audit clients that are not public interest entities 290.203 Providing services to an audit client that is not a public interest entityinvolving the design or implementation of IT systems that (a) form asignificant part of the internal control over financial reporting or (b)generate information that is significant to the client’s accounting records orfinancial statements on which the firm will express an opinion creates aself-review threat. 290.204 The self-review threat is too significant to permit such services unlessappropriate safeguards are put in place ensuring that: (a) The client acknowledges its responsibility for establishing andmonitoring a system of internal controls; (b) The client assigns the responsibility to make all managementdecisions with respect to the design and implementation of thehardware or software system to a competent employee, preferablywithin senior management; (c) The client makes all management decisions with respect to thedesign and implementation process; (d) The client evaluates the adequacy and results of the design andimplementation of the system; and (e) The client is responsible for operating the system (hardware orsoftware) and for the data it uses or generates. 290.205 Depending on the degree of reliance that will be placed on the particular ITsystems as part of the audit, a determination shall be made as to whether toprovide such non-assurance services only with personnel who are notmembers of the audit team and who have different reporting lines within thefirm. The significance of any remaining threat shall be evaluated andsafeguards applied when necessary to eliminate the threat or reduce it to anacceptable level. An example of such a safeguard is having a professionalaccountant review the audit or non-assurance work. Audit clients that are public interest entities 290.206 In the case of an audit client that is a public interest entity, a firm shall notprovide services involving the design or implementation of IT systems that (a) form a significant part o...
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