Revised Code of Ethics in the Phils - 2010

291108 if a member of the assurance team a member of

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Unformatted text preview: mily, or a firm has a direct financial interest or a material indirectfinancial interest in the assurance client, the self-interest threat createdwould be so significant that no safeguards could reduce the threat to anacceptable level. Therefore, none of the following shall have a directfinancial interest or a material indirect financial interest in the client: amember of the assurance team; a member of that individual’s immediatefamily member; or the firm. 291.107 When a member of the assurance team has a close family member who theassurance team member knows has a direct financial interest or a materialindirect financial interest in the assurance client, a self-interest threat iscreated. The significance of the threat will depend on factors such as 95 • The nature of the relationship between the member of the assuranceteam and the close family member; and • The materiality of the financial interest to the close family member. The significance of the threat shall be evaluated and safeguards appliedwhen necessary to eliminate the threat or reduce it to an acceptable level. Examples of such safeguards include: • The close family member disposing, as soon as practicable, of all ofthe financial interest or disposing of a sufficient portion of an indirectfinancial interest so that the remaining interest is no longer material; • Having a professional accountant review the work of the member ofthe assurance team; or • Removing the individual from the assurance team. 291.108 If a member of the assurance team, a member of that individual’s immediatefamily, or a firm has a direct or material indirect financial interest in anentity that has a controlling interest in the assurance client, and the client ismaterial to the entity, the self-interest threat created would be so significantthat no safeguards could reduce the threat to an acceptable level. Therefore, none of the following shall have such a financial interest: a member of theassurance team; a member of that individual’s immediate family; and thefirm. 291.109 The holding by a firm or a member of the assurance team, or a...
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This document was uploaded on 04/03/2014.

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