Revised Code of Ethics in the Phils - 2010

291117 similarly if the firm or a member of the

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Unformatted text preview: s a bank or similarinstitution is made under normal lending procedures, terms and conditionsand it is material to the assurance client or firm receiving the loan, it may bepossible to apply safeguards to reduce the self-interest threat to anacceptable level. An example of such a safeguard is having the workreviewed by a professional accountant from a network firm that is neitherinvolved with the assurance engagement nor received the loan. 291.115 A loan, or a guarantee of a loan, from an assurance client that is a bank or asimilar institution to a member of the assurance team, or a member of thatindividual’s immediate family, does not create a threat to independence ifthe loan or guarantee is made under normal lending procedures, terms andconditions. [Examples of such loans include home mortgages, bankoverdrafts, car loans and credit card balances.]Examples of such loans include credit card obligations which are normally available to other credit card holders and fully secured car loans and housing loans which are not past due. 291.116 If the firm or a member of the assurance team, or a member of thatindividual’s immediate family, accepts a loan from, or has a borrowingguaranteed by, an assurance client that is not a bank or similar institution,the self-interest threat created would be so significant that no safeguardscould reduce the threat to an acceptable level, unless the loan or guarantee isimmaterial to both the firm, or the member of the assurance team and theimmediate family member, and the client. 291.117 Similarly, if the firm, or a member of the assurance team, or a member ofthat individual’s immediate family, makes or guarantees a loan to anassurance client, the self-interest threat created would be so significant thatno safeguards could reduce the threat to an acceptable level, unless the loanor guarantee is immaterial to both the firm, or the member of the assuranceteam and the immediate family member, and the client. 291.118 If a firm or a member of the assurance team, or a member of thatindividual’s immediate family, has deposits or a brokerage account with anassurance clie...
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