Revised Code of Ethics in the Phils - 2010

In addition the firm may interview candidates and

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Unformatted text preview: essionals who are not members of the audit team to perform the service; or • Having a professional who was not involved in providing the legal services provide advice to the audit team on the service and review any financial statement treatment. 290.211 Acting in an advocacy role for an audit client in resolving a dispute or litigation when the amounts involved are material to the financial statements on which the firm will express an opinion would create advocacy and self-review threats so significant that no safeguards could reduce the threat to an acceptable level. Therefore, the firm shall not perform this type of service for an audit client. 198 290.212 When a firm is asked to act in an advocacy role for an audit client in resolving a dispute or litigation when the amounts involved are not material to the financial statements on which the firm will express an opinion, the firm shall evaluate the significance of any advocacy and selfreview threats created and apply safeguards 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; or • Having a professional who was not involved in providing the legal services advise the audit team on the service and review any financial statement treatment. 290.213 The appointment of a partner or an employee of the firm as General Counsel for legal affairs of an audit client would create self-review and advocacy threats that are so significant that no safeguards could reduce the threats to an acceptable level. The position of General Counsel is generally a senior management position with broad responsibility for the legal affairs of a company, and consequently, no member of the firm shall accept such an appointment for an audit client. Recruiting Services General Provisions 290.214 Providing recruiting services to an audit client may create self-interest, familiarity or intimidation threats. The existence and significance of any threat will depend on factors such as: • The nature of the requested assistance; and • The role of the person to be recruited. The significance of any threat created shall be evaluated and safeguards applied when necessary to eliminate the threat or reduce it to an acceptable level. In all cases, the firm shall not assume management responsibilities, including acting as a negotiator on the client’s behalf, and the hiring decision shall be...
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