Revised Code of Ethics in the Phils - 2010

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Unformatted text preview: ic practice. This Part does not describe all of the circumstances and relationships that could be encountered by a professional accountant in public practice that create or may create threats to compliance with the fundamental principles. Therefore, the professional accountant in public practice is encouraged to be alert for such circumstances and relationships. 200.2 A professional accountant in public practice shall not knowingly engage in any business, occupation, or activity that impairs or might impair integrity, objectivity or the good reputation of the profession and as a result would be incompatible with the fundamental principles. Threats and Safeguards 200.3 Compliance with the fundamental principles may potentially be threatened by a broad range of circumstances and relationships. The nature and significance of the threats may differ depending on whether they arise in relation to the provision of services to an audit client and whether the audit client is a public interest entity, to an assurance client that is not an audit client, or to a nonassurance client. Threats fall into one or more of the following categories: (a) (b) (c) (d) (e) Self-interest; Self-review; Advocacy; Familiarity; and Intimidation. These threats are discussed further in Part A of this Code. 200.4 Examples of circumstances that create self-interest threats for a professional accountant in public practice include: • A member of the assurance team having a direct financial interest in the assurance client. • A firm having undue dependence on total fees from a client. • A member of the assurance team having a significant close business relationship with an assurance client. • A firm being concerned about the possibility of losing a significant client. • A member of the audit team entering into employment negotiations with the audit client. • A firm entering into a contingent fee arrangement relating to an assurance engagement. 148 • 200.5 A professional accountant discovering a significant error when evaluating the r...
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This document was uploaded on 04/03/2014.

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