This preview shows page 1. Sign up to view the full content.
Unformatted text preview: .168 Providing an audit client with accounting and bookkeeping services, such aspreparing
accounting records or financial statements, creates a self-reviewthreat when the firm
subsequently audits the financial statements.
290.169 The audit process, however, necessitates dialogue between the firm andmanagement of the
audit client, which may involve:
• The application of accounting standards or policies and financialstatement disclosure
requirements; • The appropriateness of financial and accounting control and the methodsused in
determining the stated amounts of assets and liabilities; or • Proposing adjusting journal entries. These activities are considered tobe a normal part of
the audit process and do not, generally, createthreats to independence. 290.170 Similarly, the client may request technical assistance from the firm onmatters such as resolving
account reconciliation problems or analyzing andaccumulating information for regulatory
reporting. In addition, the clientmay request technical advice on accounting issues such as the
conversion ofexisting financial statements from one financial reporting framework toanother
(for example, to comply with group accounting policies or totransition to a different financial
reporting framework such as InternationalFinancial Reporting Standards). Such services do not,
generally, createthreats to independence provided the firm does not assume a
managementresponsibility for the client.
Audit clients that are not public interest entities
290.171 The firm may provide services related to the preparation of accountingrecords and financial
statements to an audit client that is not a publicinterest entity where the services are of a routine
or mechanical nature, solong as any self-review threat created is reduced to an acceptable
level.Examples of such services include:
• Providing payroll services based on client-originated data; 66 • Recording transactions for which the client has determined orapproved the appropriate
account classification; • Posting transactions coded by the client to the general ledger; • Posting client-approved entries to the trial balance; and • Preparing financial statements based on information in the trial balance. In all cases, the significance of any threat created shall be evaluated andsafeguards applied
when necessary to eliminate the threat or reduce it to anacceptable level. Examples of such
• Arranging for such services to be performed by a...
View Full Document
This document was uploaded on 04/03/2014.
- Spring '14