Revised Code of Ethics in the Phils - 2010

A member of the audit team who has such a

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Unformatted text preview: n a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion. The significance of the threats will depend on factors such as: • The nature of the relationship between the member of the audit team and the close family member; • The position held by the close family member; and • The role of the professional on the audit team. The significance of the threat shall be evaluated and safeguards applied when necessary to eliminate the threat or reduce it to an acceptable level. Examples of such safeguards include: • Removing the individual from the audit team; or • Structuring the responsibilities of the audit team so that the professional does not deal with matters that are within the responsibility of the close family member. 290.131 Threats to independence are created when a member of the audit team has a close relationship with a person who is not an immediate or close family member, but who is a director or officer or an employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion. A member of the audit team who has such a relationship shall consult in accordance with firm policies and procedures. The significance of the threats will depend on factors such as: • The nature of the relationship between the individual and the member of the audit team; • The position the individual holds with the client; and • The role of the professional on the audit team. The significance of the threats shall be evaluated and safeguards applied when necessary to eliminate the threats or reduce them to an acceptable level. Examples of such safeguards include: 56 • Removing the professional from the audit team; or • Structuring the responsibilities of the audit team so that the professional does not deal with matters that are within the responsibility of the individual with whom the professional has a close relationship. 290.132 Self-interest, familiarity or intimidation threats may be created by a personal or family relationship betwee...
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