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significant input regarding such matters as accounting principles and financial statement
disclosures, the appropriateness of controls and the methods used in determining the stated
amounts of assets and liabilities. Technical assistance of this nature and advice on
accounting principles for financial statement audit clients are an appropriate means to
promote the fair presentation of the financial statements. The provision of such advice does
not generally threaten the firm’s independence.
“Similarly, the financial statement audit process may involve assisting an audit client in
resolving account reconciliation problems, analyzing and accumulating information for
regulatory reporting, assisting in the preparation of consolidated financial statements
9 (including the translation of local statutory accounts to comply with group accounting policies
and the transition to a different reporting framework such as Philippine Financial Reporting
Standards), drafting disclosure items, proposing adjusting journal entries and providing
assistance and advice in the preparation of local statutory accounts of subsidiary entities.
These services are considered to be a normal part of the audit process and do not, under
normal circumstances, threaten independence.”
The Ethics Committee (FY 2012-2013) proposes the following provisions:
“Sec. 290.169 Preparing Accounting Records and Financial Statements
“The audit process, however, necessitates dialogue between the firm and management
of the audit client, which may involve:
A. The application of accounting standards or policies and financial statement
B. The appropriateness of financial and accounting control and the methods used in
determining the stated amounts of assets and liabilities; or
C. Proposing adjusting journal entries.
“These activities are considered to be a normal part of the audit process and do not
generally create threats to independence.
“Similarly, the client may request technical assistance from the firm on matters such as
resolving account reconciliation problems, or analyzing and accumulating information for
regulatory reporting. In addition, the client may request technical advice on accounting
issues, such as the conversion of existing fi...
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This document was uploaded on 04/03/2014.
- Spring '14