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Unformatted text preview: ountant from concluding that a situation is permitted if it is not specifically prohibited. 290.9 Paragraphs 290.100 and onwards describe how the conceptual framework approach to
independence is to be applied. These paragraphs do not address all the circumstances and
relationships that create or may create threats to independence. 290.10 In deciding whether to accept or continue an engagement, or whether a particular individual may
be a member of the audit team, a firm shall identify and evaluate threats to independence. If the
threats are not at an acceptable level, and the decision is whether to accept an engagement or
include a particular individual on the audit team, the firm shall determine whether safeguards are
available to eliminate the threats or reduce them to an acceptable level. If the decision is whether
to continue an engagement, the firm shall determine whether any existing safeguards will
continue to be effective to eliminate the threats or reduce them to an acceptable level or whether
other safeguards will need to be applied or whether the engagement needs to be terminated.
Whenever new information about a threat to independence comes to the attention of the firm
during the engagement, the firm shall evaluate the significance of the threat in accordance with
the conceptual framework approach.
290.11 Throughout this section, reference is made to the significance of threats to independence. In
evaluating the significance of a threat, qualitative as well as quantitative factors shall be taken
290.12 This section does not, in most cases, prescribe the specific responsibility of individuals within the
firm for actions related to independence because responsibility may differ depending on the size,
structure and organization of a firm. The firm is required by International Standards on Quality
Control (ISQCs) to establish policies and procedures designed to provide it with reasonable
assurance that independence is maintained when required by relevant ethical requirements. In
addition, International Standards on Auditing (ISAs...
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- Spring '14