Revised Code of Ethics in the Phils - 2010

Audit clients that are public interest entities

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: of any threats will depend on factors such as: • The system by which the tax authorities assess and administer the tax in question and the role of the firm in that process; • The complexity of the relevant tax regime and the degree of judgment necessary in applying it; • The particular characteristics of the engagement; and • The level of tax expertise of the client’s employees. 290.183 Tax return preparation services involve assisting clients with their tax reporting obligations by drafting and completing information, including the amount of tax due (usually on standardized forms) required to be submitted to the applicable tax authorities. Such services also include advising on the tax return treatment of past transactions and responding on behalf of the audit client to the tax authorities’ requests for additional information and analysis (including providing explanations of and technical support for the approach being taken). Tax return preparation services are generally based on historical information and principally involve analysis and presentation of such historical information under existing tax law, including precedents and established practice. Further, the tax returns are subject to whatever review or approval process the tax authority deems appropriate. Accordingly, providing such services does not generally create a threat to independence if management takes responsibility for the returns including any significant judgments made. Tax Calculations for the Purpose of Preparing Accounting Entries 190 Audit clients that are not public interest entities 290.184 Preparing calculations of current and deferred tax liabilities (or assets) for an audit client for the purpose of preparing accounting entries that will be subsequently audited by the firm creates a self-review threat. The significance of the threat will depend on: (a) The complexity of the relevant tax law and regulation and the degree of judgment necessary in applying them; (b) The level of tax expertise of the client’s personnel; and (c) The materiality of the amounts to the financial statements. Safeguards shall be applied when necessary to eliminate the threat or reduce it to an acceptable level. Examples of such safeguards include: • Using professionals who are not members of the audit team to perform the service; • If the service is performed by a member of the audit team, using a partner or senior staff member with appropriate expertise who is not a member of the a...
View Full Document

Ask a homework question - tutors are online