Revised Code of Ethics in the Phils - 2010

The significance of the threat shall be evaluated and

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: with the subject matter information of the engagement shall bemade, and a determination shall be made of whether any self-review threatsthat are not at an acceptable level can be reduced to an acceptable level bythe application of safeguards. 291.149 A self-review threat may be created if the firm is involved in the preparationof subject matter information which is subsequently the subject matterinformation of an assurance engagement. For example, a self-review threatwould be created if the firm developed and prepared prospective financialinformation and subsequently provided assurance on this information.Consequently, the firm shall evaluate the significance of any self-reviewthreat created by the provision of such services and apply safeguards whennecessary to eliminate the threat or reduce it to an acceptable level. 291.150 When a firm performs a valuation that forms part of the subject matterinformation of an assurance engagement, the firm shall evaluate thesignificance of any self-review threat and apply safeguards when necessaryto eliminate the threat or reduce it to an acceptable level. Fees Fees―Relative Size 106 291.151 When the total fees from an assurance client represent a large proportion ofthe total fees of the firm expressing the conclusion, the dependence on thatclient and concern about losing the client creates a self-interest orintimidation threat. The significance of the threat will depend on factorssuch as: • The operating structure of the firm; • Whether the firm is well established or new; and • The significance of the client qualitatively and/or quantitatively tothe firm. The significance of the threat shall be evaluated and safeguards appliedwhen necessary to eliminate the threat or reduce it to an acceptable level.Examples of such safeguards include: • Reducing the dependency on the client; • External quality control reviews; or • Consulting a third party, such as a professional regulatory body or aprofessional accountant, on key assurance judgments. 291.152 A self-interest or intimid...
View Full Document

This document was uploaded on 04/03/2014.

Ask a homework question - tutors are online