Revised Code of Ethics in the Phils - 2010

Governance temporary staff assignments 290142 the

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Unformatted text preview: er (Chief Executive or equivalent) joins an audit client that is a public interest entity as: (a) An employee in a position to exert significant influence over the preparation of the entity’s accounting records or its financial statements; or (b) A director or officer of the entity. Independence would be deemed to be compromised unless twelve months have passed since the individual was the Senior or Managing Partner (Chief Executive or equivalent) of the firm. 290.141 Independence is deemed not to be compromised if, as a result of a business combination, a former key audit partner or the individual who was the firm’s former Senior or Managing Partner is in a position as described in paragraphs 290.139 and 290.140, and: (a) The position was not taken in contemplation of the business combination; 59 (b) Any benefits or payments due to the former partner from the firm have been settled in full, unless made in accordance with fixed predetermined arrangements and any amount owed to the partner is not material to the firm; (c) The former partner does not continue to participate or appear to participate in the firm’s business or professional activities; and (d) The position held by the former partner with the audit client is discussed with those charged with governance. Temporary Staff Assignments 290.142 The lending of staff by a firm to an audit client may create a self-review threat. Such assistance may be given, but only for a short period of time and the firm’s personnel shall not be involved in: (a) Providing non-assurance services that would not be permitted under this section; or (b) Assuming management responsibilities. In all circumstances, the audit client shall be responsible for directing andsupervising the activities of the loaned staff. The significance of any threat shall be evaluated and safeguards appliedwhen necessary to eliminate the threat or reduce it to an acceptable level.Examples of such safeguards include: • Conducting an additional review of the work performed by theloaned staff; • Not giving the loaned staff audit responsibility for any function oractivity that the staff performed during the temporary staffassignment; or • Not including the loaned staff as a member of the audit team. Recent Service with an Audit Client 290.143 Self-interes...
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