Revised Code of Ethics in the Phils - 2010

291105 financial interests may be held through an

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Unformatted text preview: explains that, in the majority of assuranceengagements, there is one responsible party and that responsible party is theassurance client. However, in some assurance engagements there are two ormore responsible parties. In such circumstances, an evaluation shall bemade of any threats the firm has reason to believe are created by interestsand relationships between a member of the assurance team, the firm, anetwork firm and the party responsible for the subject matter. For assurancereports that include a restriction on use and distribution, the paragraphs areto be read in the context of paragraphs 291.21 to 291.27. 291.102 Interpretation 2005–01 provides further guidance on applying the independencerequirements contained in this section to assurance engagements. 291.103 Paragraphs 291.104 to 291.120 contain references to the materiality of afinancial interest, loan, or guarantee, or the significance of a businessrelationship. For the purpose of determining whether such an interest ismaterial to an individual, the combined net worth of the individual and theindividual’s immediate family members may be taken into account. Financial Interests 291.104 Holding a financial interest in an assurance client may create a self-interestthreat. The existence and significance of any threat created depends on: (a) The role of the person holding the financial interest, (b) Whether the financial interest is direct or indirect, and (c) The materiality of the financial interest. 291.105 Financial interests may be held through an intermediary (for example, acollective investment vehicle, estate or trust). The determination of whethersuch financial interests are direct or indirect will depend upon whether thebeneficial owner has control over the investment vehicle or the ability toinfluence its investment decisions. When control over the investmentvehicle or the ability to influence investment decisions exists, this Codedefines that financial interest to be a direct financial interest. Conversely,when the beneficial owner of the financial interest has no control over theinvestment vehicle or ability to influence its investment decisions, this Code defines that financial interest to be an indirect financial interest. 291.106 If a member of the assurance team, a member of that individual’s immediatefa...
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This document was uploaded on 04/03/2014.

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