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Unformatted text preview: that has been authorizedby management or monitoring the dates for filing statutory
returns andadvising an audit client of those dates is deemed not to be a
managementresponsibility. Further, providing advice and recommendations to
assistmanagement in discharging its responsibilities is not assuming amanagement
290.165 If a firm were to assume a management responsibility for an audit client, thethreats created
would be so significant that no safeguards could reduce thethreats to an acceptable level. For
example, deciding whichrecommendations of the firm to implement will create self-review and
self-interestthreats. Further, assuming a management responsibility creates afamiliarity threat
because the firm becomes too closely aligned with theviews and interests of management.
Therefore, the firm shall not assume amanagement responsibility for an audit client.
290.166 To avoid the risk of assuming a management responsibility when providingnon-assurance
services to an audit client, the firm shall be satisfied that amember of management is
responsible for making the significant judgmentsand decisions that are the proper responsibility
of management, evaluatingthe results of the service and accepting responsibility for the actions
to betaken arising from the results of the service. This reduces the risk of thefirm inadvertently
making any significant judgments or decisions on behalfof management. The risk is further 65 reduced when the firm gives the clientthe opportunity to make judgments and decisions based
on an objective andtransparent analysis and presentation of the issues.
Preparing Accounting Records and Financial Statements
290.167 Management is responsible for the preparation and fair presentation of thefinancial statements
in accordance with the applicable financial reportingframework. These responsibilities include:
• Originating or changing journal entries, or determining the accountclassifications of
transactions; and • Preparing or changing source documents or originating data, inelectronic or other form,
evidencing the occurrence of a transaction (forexample, purchase orders, payroll time
records, and customer orders). 290...
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This document was uploaded on 04/03/2014.
- Spring '14