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Unformatted text preview: reason to believe
that a relationship orcircumstance involving a related entity of the client is relevant to
theevaluation of the firm’s independence of the client, the audit team shallinclude that related
entity when identifying and evaluating threats toindependence and applying appropriate
Networks and Network Firms
290.507 When the conditions set out in paragraphs 290.500 to 290.502 are met,reference to the firm
does not include network firms. However, when thefirm knows or has reason to believe that
threats are created by any interestsand relationships of a network firm, they shall be included in
the evaluationof threats to independence. 85 Financial Interests, Loans and Guarantees, Close Business Relationships andFamily and Personal
290.508 When the conditions set out in paragraphs 290.500 to 290.502 are met, therelevant provisions
set out in paragraphs 290.102 to 290.145 apply only tothe members of the engagement team,
their immediate family members andclose family members.
290.509 In addition, a determination shall be made as to whether threats toindependence are created by
interests and relationships, as described inparagraphs 290.102 to 290.145, between the audit
client and the followingmembers of the audit team:
(a) Those who provide consultation regarding technical or industryspecific issues,
transactions or events; and (b) Those who provide quality control for the engagement, includingthose who perform the
engagement quality control review. An evaluation shall be made of the significance of any threats that theengagement team has
reason to believe are created by interests andrelationships between the audit client and others
within the firm who candirectly influence the outcome of the audit engagement, including
thosewho recommend the compensation of, or who provide direct supervisory,management or
other oversight of the audit engagement partner inconnection with the performance of the audit
engagement (including thoseat all successively senior levels above the engagement partner
through tothe individual who is the firm’s Senior or Managing Partner...
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This document was uploaded on 04/03/2014.
- Spring '14