Revised Code of Ethics in the Phils - 2010

29034 the firm shall take steps necessary to

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Unformatted text preview: ll evaluate any threat to independence created by the service. If a threat is not at an acceptable level, the audit engagement shall only be accepted if safeguards are applied to eliminate any threats or reduce them to an acceptable level. Examples of such safeguards include: • Not including personnel who provided the non-assurance service as members of the audit team; • Having a professional accountant review the audit and non-assurance work as appropriate; or • Engaging another firm to evaluate the results of the non-assurance service or having another firm re-perform the non-assurance service to the extent necessary to enable it to take responsibility for the service. Mergers and Acquisitions 290.33 When, as a result of a merger or acquisition, an entity becomes a related entity of an audit client, the firm shall identify and evaluate previous and current interests and relationships with the related entity that, taking into account available safeguards, could affect its independence and therefore its ability to continue the audit engagement after the effective date of the merger or acquisition. 290.34 The firm shall take steps necessary to terminate, by the effective date of the merger or acquisition, any current interests or relationships that are not permitted under this Code. However, if such a current interest or relationship cannot reasonably be terminated by the effective date of the merger or acquisition, for example, because the related entity is unable by the effective date to 46 effect an orderly transition to another service provider of a non-assurance service provided by the firm, the firm shall evaluate the threat that is created by such interest or relationship. The more significant the threat, the more likely the firm’s objectivity will be compromised and it will be unable to continue as auditor. The significance of the threat will depend upon factors such as: • The nature and significance of the interest or relationship; • The nature and significance of the related entity relat...
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This document was uploaded on 04/03/2014.

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