Revised Code of Ethics in the Phils - 2010

The modifications are not permitted in the case of an

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Unformatted text preview: accepts gifts or hospitality, unless the value is trivial and inconsequential, the threats created would be so significant that no safeguards could reduce the threats to an acceptable level. Consequently, a firm or a member of the audit team shall not accept such gifts or hospitality. Actual or Threatened Litigation 290.231 When litigation takes place, or appears likely, between the firm or a member of the audit team and the audit client, self-interest and intimidation threats are created. The relationship between client management and the members of the audit team must be characterized by complete candor and full disclosure regarding all aspects of a client’s business operations. When the firm and the client’s management are placed in adversarial positions by actual or threatened litigation, affecting management’s willingness to make complete disclosures, self-interest and intimidation threats are created. The significance of the threats created will depend on such factors as: • The materiality of the litigation; and 204 • Whether the litigation relates to a prior audit engagement. The significance of the threats shall be evaluated and safeguards applied when necessary to eliminate the threats or reduce them to an acceptable level. Examples of such safeguards include: • If the litigation involves a member of the audit team, removing that individual from the audit team; or • Having a professional review the work performed. If such safeguards do not reduce the threats to an acceptable level, the only appropriate action is to withdraw from, or decline, the audit engagement. Paragraphs 290.232 to 290.499 are intentionally left blank. SECTION 290 Reports that Include a Restriction on Use and Distribution Introduction 290.500 The independence requirements in Section 290 apply to all audit engagements. However, in certain circumstances involving audit engagements where the report includes a restriction on use and distribution, and provided the conditions descri...
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This document was uploaded on 04/03/2014.

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