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not be assigned to the audit team.
290.145 Self-interest, self-review or familiarity threats may be created if, before the period covered by
the audit report, a member of the audit team had served as a director or officer of the audit
client, or was an employee in a position to exert significant influence over the preparation of
the client’s accounting records or financial statements on which the firm will express an
opinion. For example, such threats would be created if a decision made or work performed by
the individual in the prior period, while employed by the client, is to be evaluated in the current
period as part of the current audit engagement. The existence and significance of any threats
will depend on factors such as:
• The position the individual held with the client; • The length of time since the individual left the client; and • The role of the professional on the audit team. The significance of any threat shall be evaluated and safeguards applied when necessary to
reduce the threat to an acceptable level. An example of such a safeguard is conducting a review
of the work performed by the individual as a member of the audit team. Serving as a Director or Officer of an Audit Client
290.146 If a partner or employee of the firm serves as a director or officer of an audit client, the selfreview and self-interest threats created would be so significant that no safeguards could reduce
the threats to an acceptable level. Accordingly, no partner or employee shall serve as a director
or officer of an audit client.
290.147 The position of Company Secretary has different implications in different jurisdictions. Duties
may range from administrative duties, such as personnel management and the maintenance of
company records and registers, to duties as diverse as ensuring that the company complies with
regulations or providing advice on corporate governance matters. Generally, this position is
seen to imply a close association with the entity.
290.148 If a partner or employee of the firm serves as Company Secretary for an audit client, selfreview and advocacy threats are created that would generally be so significant that no
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This document was uploaded on 04/03/2014.
- Spring '14