Revised Code of Ethics in the Phils - 2010

On receiving such notification the significance of

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Unformatted text preview: ether the individual was responsible for maintaining regular contact with the client’s management or those charged with governance. The significance of any threats created shall be evaluated and safeguards applied when necessary to eliminate the threats or reduce them to an acceptable level. Examples of such safeguards include: • Modifying the audit plan; • Assigning individuals to the audit team who have sufficient experience in relation to the individual who has joined the client; or 58 • Having a professional accountant review the work of the former member of the audit team. 290.137 If a former partner of the firm has previously joined an entity in such a position and the entity subsequently becomes an audit client of the firm, the significance of any threat to independence shall be evaluated and safeguards applied when necessary to eliminate the threat or reduce it to an acceptable level. 290.138 A self-interest threat is created when a member of the audit team participates in the audit engagement while knowing that the member of the audit team will, or may, join the client sometime in the future. Firm policies and procedures shall require members of an audit team to notify the firm when entering employment negotiations with the client. On receiving such notification, 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: • Removing the individual from the audit team; or • A review of any significant judgments made by that individual while on the team. Audit Clients that are Public Interest Entities 290.139 Familiarity or intimidation threats are created when a key audit partner joins the audit client that is a public interest entity as: (a) A director or officer of the entity; or (b) An employee in a position to exert significant influence over the preparation of the clients accounting records or the financial statements on which the firm will express an opinion. Independence would be deemed to be compromised unless, subsequent to the partner ceasing to be a key audit partner, the public interest entity had issued audited financial statements covering a period of not less than twelvemonths and the partner was not a member of the audit team with respect to the audit of those financial statements. 290.140 An intimidation threat is created when the individual who was the firm’s Senior or Managing Partn...
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This document was uploaded on 04/03/2014.

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