Revised Code of Ethics in the Phils - 2010

Where the result of the valuation will have a direct

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Unformatted text preview: stence and significance of any threat will depend on factors such as: • The degree of subjectivity involved in determining the appropriate treatment for the tax advice in the financial statements; • The extent to which the outcome of the tax advice will have a material effect on the financial statements; • Whether the effectiveness of the tax advice depends on the accounting treatment or presentation in the financial statements and there is doubt as to the appropriateness of the accounting treatment or presentation under the relevant financial reporting framework; • The level of tax expertise of the client’s employees; • The extent to which the advice is supported by tax law or regulation, other precedent or established practice; and • Whether the tax treatment is supported by a private ruling or has otherwise been cleared by the tax authority before the preparation of the financial statements. For example, providing tax planning and other tax advisory services where the advice is clearly supported by tax authority or other precedent, by established practice or has a basis in tax law that is likely to prevail does not generally create a threat to independence. 290.189 The significance of any threat shall be evaluated and safeguards applied when necessary to eliminate the threat or reduce it to an acceptable level. Examples of such safeguards include: • Using professionals who are not members of the audit team to perform the service; • Having a tax professional, who was not involved in providing the tax service, advise the audit team on the service and review the financial statement treatment; • Obtaining advice on the service from an external tax professional; or • Obtaining pre-clearance or advice from the tax authorities. 290.190 Where the effectiveness of the tax advice depends on a particular accounting treatment or presentation in the financial statements and: (a) The audit team has reasonable doubt as to the appropriateness of the related accounting treatment or presentation under the relevant financial reporting framework; and (b) The outcome or consequences of the tax advice will have a material effect on the financial statements on which the firm will express an opinion; 192 The self-review threat would be so significant that no safeguards could reduce the threat to an acceptable level. Accordingly, a firm shall not provide such tax advice to an audit client. 290.191 In providing tax services to an audit client, a firm may...
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This document was uploaded on 04/03/2014.

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