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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
• 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...
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This document was uploaded on 04/03/2014.
- Spring '14