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Unformatted text preview: 35 Company 10 9,635 Total 104,301 The engagement could be structured in differing ways:
A1 Each company measures its reserves and provides an assertion to the firm and to intended users. A2 An entity other than the companies measures the reserves and provides an assertion to the firm
and to intended users. Direct Reporting Engagements
D1 Each company measures the reserves and provides the firm with a written representation that
measures its reserves against the established criteria for measuring proven reserves. The
representation is not available to the intended users. D2 The firm directly measures the reserves of some of the companies. Application of Approach
A1 Each company measures its reserves and provides an assertion to the firm and to intended users. There are several responsible parties in this engagement (Companies 1–10). When determining whether it
is necessary to apply the independence provisions to all of the companies, the firm may take into account
whether an interest or relationship with a particular company would create a threat to independence that is
not at an acceptable level. This will take into account factors such as: 232 • The materiality of the company’s proven reserves in relation to the total reserves to be reported on;
and • The degree of public interest associated with the engagement (paragraph 291.28). For example Company 8 accounts for 0.17% of the total reserves, therefore a business relationship or
interest with Company 8 would create less of a threat than a similar relationship with Company 6, which
accounts for approximately 37.5% of the reserves.
Having determined those companies to which the independence requirements apply, the assurance team
and the firm are required to be independent of those responsible parties that would be considered to be the
assurance client (paragraph 291.28).
A2 An entity other than the companies measures the reserves and provides an assertion to the firm
and to intended users. The firm shall be...
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- Spring '14