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Unformatted text preview: h an interest shall not be held unless:
(a) Neither the trustee, nor an immediate family member of the trustee, nor the firm are
beneficiaries of the trust; 172 (b) The interest in the audit client held by the trust is not material to the trust; (c) The trust is not able to exercise significant influence over the audit client; and (d) The trustee, an immediate family member of the trustee, or the firm cannot significantly
influence any investment decision involving a financial interest in the audit client. 290.115 Members of the audit team shall determine whether a self-interest threat is created by any
known financial interests in the audit client held by other individuals including:
(a) Partners and professional employees of the firm, other than those referred to above, or
their immediate family members; and (b) Individuals with a close personal relationship with a member of the audit team. Whether these interests create a self-interest threat will depend on factors such as:
• The firm’s organizational, operating and reporting structure; and • The nature of the relationship between the individual and the member of the audit team. 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:
• Removing the member of the audit team with the personal relationship from the audit team; • Excluding the member of the audit team from any significant decisionmaking concerning
the audit engagement; or • Having a professional accountant review the work of the member of the audit team. 290.116 If a firm or a partner or employee of the firm, or a member of that individual’s immediate
family, receives a direct financial interest or a material indirect financial interest in an audit
client, for example, by way of an inheritance, gift or as a result of a merger and such interest
would not be permitted to be held under this section, then:
(a) If the interest is received by the firm, the financial interest shall...
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- Spring '14