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Unformatted text preview: bed in paragraphs 290.501 to 290.502
are met, the independence requirements in this section may be modified as provided in
paragraphs 290.505 to 290.514. These paragraphs are only applicable to an audit engagement
on special purpose financial statements (a) that is intended to provide a conclusion in positive
or negative form that the financial statements are prepared in all material respects, in
accordance with the applicable financial reporting framework, including, in the case of a fair
presentation framework, that the financial statements give a true and fair view or are presented
fairly, in all material respects, in accordance with the applicable financial reporting framework,
and (b) where the audit report includes a restriction on use and distribution. The modifications
are not permitted in the case of an audit of financial statements required by law or regulation.
290.501 The modifications to the requirements of Section 290 are permitted if the intended users of the
report (a) are knowledgeable as to the purpose and limitations of the report, and (b) explicitly
agree to the application of the modified independence requirements. Knowledge as to the
purpose and limitations of the report may be obtained by the intended users through their
participation, either directly or indirectly through their representative who has the authority to
act for the intended users, in establishing the nature and scope of the engagement. Such
participation enhances the ability of the firm to communicate with intended users about
independence matters, including the circumstances that are relevant to the evaluation of the
threats to independence and the applicable safeguards necessary to eliminate the threats or
reduce them to an acceptable level, and to obtain their agreement to the modified independence
requirements that are to be applied.
290.502 The firm shall communicate (for example, in an engagement letter) with the intended users
regarding the independence requirements that are to be applied with respect to the provision of
the audit engagement. Where the intended users are a class of users (for example, lenders in a
syndicated loan arrangement) who are not specifically identifiable b...
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- Spring '14