Revised Code of Ethics in the Phils - 2010

4 where it is not possible to reduce the threats to

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Unformatted text preview: lationship, a professional accountant in public practice shall determine whether acceptance would create any threats to compliance with the fundamental principles. Potential threats to integrity or professional behavior may be created from, for example, questionable issues associated with the client (its owners, management or activities). 210.2 Client issues that, if known, could threaten compliance with the fundamental principles include, for example, client involvement in illegal activities (such as money laundering), dishonesty or questionable financial reporting practices. 210.3 A professional accountant in public practice shall evaluate the significance of any threats and apply safeguards when necessary to eliminate them or reduce them to an acceptable level. Examples of such safeguards include: • Obtaining knowledge and understanding of the client, its owners, managers and those responsible for its governance and business activities; or • Securing the client’s commitment to improve corporate governance practices or internal controls. 30 210.4 Where it is not possible to reduce the threats to an acceptable level, the professional accountant in public practice shall decline to enter into the client relationship. 210.5 It is recommended that a professional accountant in public practice periodically review acceptance decisions for recurring client engagements. Engagement Acceptance 210.6 The fundamental principle of professional competence and due care imposes an obligation on a professional accountant in public practice to provide only those services that the professional accountant in public practice is competent to perform. Before accepting a specific client engagement, a professional accountant in public practice shall determine whether acceptance would create any threats to compliance with the fundamental principles. For example, a selfinterest threat to professional competence and due care is created if the engagement team does not possess, or cannot acquire, the competencies necessary to properly carry out the engagement. 210.7 A professional accountant in public practice shall evaluate the significance of threats and apply sa...
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