This preview shows page 1. Sign up to view the full content.
Unformatted text preview: who are not members of the firm.
Thesignificance of the threat will depend on factors such as:
• The materiality of the related financial statement amounts; • The risk of misstatement of the assertions related to those financialstatement amounts; and • The degree of reliance that will be placed on the internal audit service. The significance of the threat shall be evaluated and safeguards appliedwhen necessary to
eliminate the threat or reduce it to an acceptable level.An example of such a safeguard is using
professionals who are notmembers of the audit team to perform the internal audit service.
Audit clients that are public interest entities
290.200 In the case of an audit client that is a public interest entity, a firm shall notprovide internal audit
services that relate to:
(a) A significant part of the internal controls over financial reporting; (b) Financial accounting systems that generate information that is,separately or in the
aggregate, significant to the client’s accountingrecords or financial statements on which
the firm will express anopinion; or (c) Amounts or disclosures that are, separately or in the aggregate,material to the financial
statements on which the firm will express anopinion. IT Systems Services
290.201 Services related to information technology (IT) systems include the designor implementation of
hardware or software systems. The systems mayaggregate source data, form part of the internal
control over financialreporting or generate information that affects the accounting records
orfinancial statements, or the systems may be unrelated to the audit client’saccounting records,
the internal control over financial reporting or financialstatements. Providing systems services
may create a self-review threatdepending on the nature of the services and the IT systems.
290.202 The following IT systems services are deemed not to create a threat toindependence as long as
the firm’s personnel do not assume a managementresponsibility:
(a) Design or implementation of IT systems that are unrelated to internalcontrol over
financial reporting; (b) Design or implementation of IT systems that do not generateinformation forming a
significant part of the accounting records orfinancial statements; 75 (c) Implementation of “off-the-shelf” accounting or financialinformation reporting software
that was not developed by the firm ifthe customization required to meet the...
View Full Document
- Spring '14