Revised Code of Ethics in the Phils - 2010

The closeness of the relationship is such that no

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Unformatted text preview: e firm distributes or markets the client’s products or services, or the client distributes or markets the firm’s products or services. Unless any financial interest is immaterial and the business relationship is insignificant to the firm and the client or its management, the threat created would be so significant that no safeguards could reduce the threat to an acceptable level. Therefore, unless the financial interest is immaterial and the business relationship is insignificant, the business relationship shall not be 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 financial interest 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 a member of the assurance team and the assurance client or its management, the significance of any threat shall be evaluated and safeguards applied when 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, or a member of the assurance team, or a member of that individual’s immediate family, does not generally create a threat to independence if the transaction is in the normal course of business and at arm’s length. However, such transactions may be of such a nature or magnitude that they create a self-interest threat. The significance of any 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: • Eliminating or reducing the magnitude of the transaction; or • Removing the individual from the assurance team. Family and Personal Relationships 291.121 Family and personal relationships between a member of the assurance team and a director or officer or certain employees (depending on their role) o...
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This document was uploaded on 04/03/2014.

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