Revised Code of Ethics in the Phils - 2010

2918 paragraphs 291100 and onwards describe how the

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Unformatted text preview: jectivity or professionalskepticism has been compromised. 88 291.6 The conceptual framework approach shall be applied by professionalaccountants to: (a) Identify threats to independence; (b) Evaluate the significance of the threats identified; and (c) Apply safeguards when necessary to eliminate the threats or reducethem to an acceptable level. When the professional accountant determines that appropriate safeguardsare not available or cannot be applied to eliminate the threats or reducethem to an acceptable level, the professional accountant shall eliminate thecircumstance or relationship creating the threats or decline or terminate theassurance engagement. A professional accountant shall use professional judgment in applying thisconceptual framework. 291.7 Many different circumstances, or combinations of circumstances, may berelevant in assessing threats to independence. It is impossible to defineevery situation that creates threats to independence and to specify theappropriate action. Therefore, this Code establishes a conceptual frameworkthat requires firms and members of assurance teams to identify, evaluate,and address threats to independence. The conceptual framework approachassists professional accountants in public practice in complying with theethical requirements in this Code. It accommodates many variations incircumstances that create threats to independence and can deter aprofessional accountant from concluding that a situation is permitted if it isnot specifically prohibited. 291.8 Paragraphs 291.100 and onwards describe how the conceptual frameworkapproach to independence is to be applied. These paragraphs do not addressall the circumstances and relationships that create or may create threats toindependence. 291.9 In deciding whether to accept or continue an engagement, or whether aparticular individual may be a member of the assurance team, a firm shallidentify and evaluate any threats to independence. If the threats are not at anacceptable level, and the decision is whether to accept an engagement orinclude a particular individual on the assurance team, the firm shalldetermine whether safeguards are available to eliminate the threats orreduce them to an acceptable level. If the decisio...
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