Revised Code of Ethics in the Phils - 2010

Examples of such safeguards include the close family

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Unformatted text preview: er of the audit team, a member of that individual’s immediate family, or a firm has a direct financial interest or a material indirect financial interest in the audit client, the selfinterest threat created would be so significant that no safeguards could reduce the threat to an acceptable level. Therefore, none of the following shall have a direct financial interest or a material indirect financial interest in the client: a member of the audit team; a member of that individual’s immediate family; or the firm. 290.105 When a member of the audit team has a close family member who the audit team member knows has a direct financial interest or a material indirect financial interest in the audit client, a self-interest threat is created. The significance of the threat will depend on factors such as: • The nature of the relationship between the member of the audit team and the close family member; and • The materiality of the financial interest to the close family member. 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: • The close family member disposing, as soon as practicable, of all of the financial interest or disposing of a sufficient portion of an indirect financial interest so that the remaining interest is no longer material; • Having a professional accountant review the work of the member of the audit team; or • Removing the individual from the audit team. 290.106 If a member of the audit team, a member of that individual’s immediate family, or a firm has a direct or material indirect financial interest in an entity that has a controlling interest in the audit client, and the client is material to the entity, the self-interest threat created would be so significant that no safeguards could reduce the threat to an acceptable level. Therefore, none of 49 the following shall have such a financial interest: a member of the audit team; a member of that individual’s immediate family; and the firm. 290.107 The holding by a firm’s retirement benefit plan of a direct or material indi...
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This document was uploaded on 04/03/2014.

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