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
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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- Spring '14