Revised Code of Ethics in the Phils - 2010

291144 whether an activity is a management

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Unformatted text preview: ents 291.140 Firms have traditionally provided to their assurance clients a range of non-assuranceservices that are consistent with their skills and expertise.Providing non-assurance services may, however, create threats to theindependence of the firm or members of the assurance team. The threatscreated are most often self-review, self-interest and advocacy threats. 291.141 When specific guidance on a particular non-assurance service is notincluded in this section, the conceptual framework shall be applied whenevaluating the particular circumstances. 291.142 Before the firm accepts an engagement to provide a non-assurance serviceto an assurance client, a determination shall be made as to whetherproviding such a service would create a threat to independence. Inevaluating the significance of any threat created by a particular nonassuranceservice, consideration shall be given to any threat that theassurance team has reason to believe is created by providing other relatednon-assurance services. If a threat is created that cannot be reduced to anacceptable level by the application of safeguards the non-assurance serviceshall not be provided. Management Responsibilities 291.143 Management of an entity performs many activities in managing the entity inthe best interests of stakeholders of the entity. It is not possible to specifyevery activity that is a management responsibility. However, managementresponsibilities involve leading and directing an entity, including makingsignificant decisions regarding the acquisition, deployment and control ofhuman, financial, physical and intangible resources. 291.144 Whether an activity is a management responsibility depends on thecircumstances and requires the exercise of judgment. Examples of activitiesthat would generally be considered a management responsibility include: • Setting policies and strategic direction; • Directing and taking responsibility for the actions of the entity’semployees; • Authorizing transactions; • Deciding which recommendations of the firm or other third parties toimplement; and • Taking responsibility for designing, implementing and maintaininginternal control. 105 291.145 Activities that are routine and administrative, or involve matters that areinsignifica...
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