Revised Code of Ethics in the Phils - 2010

Example 110 the following example has been developed

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Unformatted text preview: rty, which is responsible for the subject matter. Multiple Responsible Parties In both assertion-based assurance engagements and direct reporting assuranceengagements there may be several responsible parties. For example, a publicaccountant in public practice may be asked to provide assurance on the monthlycirculation statistics of a number of independently owned newspapers. Theassignment could be an assertion based assurance engagement where eachnewspaper measures its circulation and the statistics are presented in an assertion thatis available to the intended users. Alternatively, the assignment could be a directreporting assurance engagement, where there is no assertion and there may or maynot be a written representation from the newspapers. In such engagements, when determining whether it is necessary to apply theprovisions in Section 291 to each responsible party, the firm may take into accountwhether an interest or relationship between the firm, or a member of the assuranceteam, and a particular responsible party would create a threat to independence that isnot trivial and inconsequential in the context of the subject matter information. This will take into account: (a) The materiality of the subject matter information (or the subject matter) forwhich the particular responsible party is responsible; and (b) The degree of public interest that is associated with the engagement. If the firm determines that the threat to independence created by any suchrelationships with a particular responsible party would be trivial and inconsequentialit may not be necessary to apply all of the provisions of this section to thatresponsible party. Example 110 The following example has been developed to demonstrate the application of Section291. It is assumed that the client is not also a financial statement audit client of thefirm, or a network firm. A firm is engaged to provide assurance on the total proven oil reserves of 10independent companies. Each company has conducted geographical and engineeringsurveys to d...
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This document was uploaded on 04/03/2014.

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