Revised Code of Ethics in the Phils - 2010

In the case of a member of the assurance team unless

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Unformatted text preview: nt that is a bank, broker, or similar institution, a threat toindependence is not created if the deposit or account is held under normalcommercial terms. Business Relationships 291.119 A close business relationship between a firm, or a member of the assuranceteam, or a member of that individual’s immediate family, and the assuranceclient or its management arises from a commercial relationship or commonfinancial interest and may create self-interest or intimidation threats.Examples of such relationships include: 98 • Having a financial interest in a joint venture with either the client ora controlling owner, director or officer or other individual whoperforms senior managerial activities for that client. • Arrangements to combine one or more services or products of thefirm with one or more services or products of the client and to marketthe package with reference to both parties. • Distribution or marketing arrangements under which the firmdistributes or markets the client’s products or services, or the clientdistributes or markets the firm’s products or services. Unless any financial interest is immaterial and the business relationship isinsignificant to the firm and the client or its management, the threat createdwould be so significant that no safeguards could reduce the threat to anacceptable level. Therefore, unless the financial interest is immaterial andthe business relationship is insignificant, the business relationship shall notbe entered into, or shall be reduced to an insignificant level or terminated. In the case of a member of the assurance team, unless any such financialinterest is immaterial and the relationship is insignificant to that member,the individual shall be removed from the assurance team. If the business relationship is between an immediate family member of amember of the assurance team and the assurance client or its management,the significance of any threat shall be evaluated and safeguards appliedwhen necessary to eliminate the threat or reduce it to an acceptable level. 291.120 The purchase of goods and services from an assurance client by the firm, ora member of the assurance team, or a member of that individual’sim...
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