Revised Code of Ethics in the Phils - 2010

291127 when an inadvertent violation of this section

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Unformatted text preview: and safeguards appliedwhen necessary to eliminate the threats or reduce them to an acceptablelevel. Examples of such safeguards include: • Removing the professional from the assurance team; or • Structuring the responsibilities of the assurance team so that theprofessional does not deal with matters that are within theresponsibility of the individual with whom the professional has aclose relationship. 291.126 Self-interest, familiarity or intimidation threats may be created by apersonal or family relationship between (a) a partner or employee of thefirm who is not a member of the assurance team and (b) a director or officerof the assurance client or an employee in a position to exert significantinfluence over the subject matter information of the assurance engagement.The existence and significance of any threat will depend on factors such as: • The nature of the relationship between the partner or employee of thefirm and the director or officer or employee of the client; • The interaction of the partner or employee of the firm with theassurance team; • The position of the partner or employee within the firm; and • The role of the individual within the client. The significance of any threat shall be evaluated and safeguards appliedwhen necessary to eliminate the threat or reduce it to an acceptable level.Examples of such safeguards include: • Structuring the partner’s or employee’s responsibilities to reduce anypotential influence over the assurance engagement; or • Having a professional accountant review the relevant assurance workperformed. 291.127 When an inadvertent violation of this section as it relates to family and personalrelationships occurs, it is deemed not to compromise independence if: (a) The firm has established policies and procedures that require promptnotification to the firm of any breaches resulting from changes in theemployment status of their immediate or close family members orother personal relationships that create threats to independence; 101 (b) The inadvertent violation relates to an immediate family member of amember of the assurance team becoming a director or officer of theassurance client or being in a position to exert signifi...
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