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Unformatted text preview: udit team to review the tax
calculations; or • Obtaining advice on the service from an external tax professional. Audit clients that are public interest entities
290.185 Except in emergency situations, in the case of an audit client that is a public interest entity, a
firm shall not prepare tax calculations of current and deferred tax liabilities (or assets) for the
purpose of preparing accounting entries that are material to the financial statements on which
the firm will express an opinion.
290.186 The preparation of calculations of current and deferred tax liabilities (or assets) for an audit
client for the purpose of the preparation of accounting entries, which would otherwise not be
permitted under this section, may be provided to audit clients in emergency or other unusual
situations when it is impractical for the audit client to make other arrangements. This may be
the case when (a) only the firm has the resources and necessary knowledge of the client’s
business to assist the client in the timely preparation of its calculations of current and deferred
tax liabilities (or assets), and (b) a restriction on the firm’s ability to provide the services would
result in significant difficulties for the client (for example, as might result from a failure to meet
regulatory reporting requirements). In such situations, the following conditions shall be met:
(a) Those who provide the services are not members of the audit team; (b) The services are provided for only a short period of time and are not expected to recur;
and (c) The situation is discussed with those charged with governance. Tax Planning and Other Tax Advisory Services 191 290.187 Tax planning or other tax advisory services comprise a broad range of services, such as
advising the client how to structure its affairs in a tax efficient manner or advising on the
application of a new tax law or regulation.
290.188 A self-review threat may be created where the advice will affect matters to be reflected in the
financial statements. The exi...
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- Spring '14