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(a) All listed entities; and
(b) Any entity:
(i) Defined by regulation or legislation as a public interest entity; or
(ii) For which the audit is required by regulation or legislation to be conducted in compliance
with the same independence requirements that apply to the audit of listed entities. Such
regulation may be promulgated by any relevant regulator, including an audit regulator.
44 290.26 Firms and member bodies are encouraged to determine whether to treat additional entities, or
certain categories of entities, as public interest entities because they have a large number and
wide range of stakeholders. Factors to be considered include:
• The nature of the business, such as the holding of assets in a fiduciary capacity for a large
number of stakeholders. Examples may include financial institutions, such as banks and
insurance companies, and pension funds; • Size; and • Number of employees. Related Entities
290.27 In the case of an audit client that is a listed entity, references to an audit client in this section
include related entities of the client (unless otherwise stated). For all other audit clients,
references to an audit client in this section include related entities over which the client has direct
or indirect control. When the audit team knows or has reason to believe that a relationship or
circumstance involving another related entity of the client is relevant to the evaluation of the
firm’s independence from the client, the audit team shall include that related entity when
identifying and evaluating threats to independence and applying appropriate safeguards. Those Charged with Governance
290.28 Even when not required by the Code, applicable auditing standards, law or regulation, regular
communication is encouraged between the firm and those charged with governance of the audit
client regarding relationships and other matters that might, in the firm’s opinion, reasonably bear
on independence. Such communication enables those charged with governance to:
(a) Consider the firm’s judgments in identifying and evaluating threats to independence,
(b) Consider the appropriateness of safeguards applied to eliminate them or reduce them to an
acceptable level, and
(c) Take appropriate action. Such an approach can be particularly...
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This document was uploaded on 04/03/2014.
- Spring '14