Revised Code of Ethics in the Phils - 2010

The adequacy of the internal audit services and the

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Unformatted text preview: Review of compliance with laws, regulations and other external requirements, and with management policies and directives and other internal requirements. 290.196 Internal audit services involve assisting the audit client in the performance of its internal audit activities. The provision of internal audit services to an audit client creates a self-review threat to independence if the firm uses the internal audit work in the course of a subsequent external audit. Performing a significant part of the client’s internal audit activities increases the possibility that firm personnel providing internal audit services will assume a management responsibility. If the firm’s personnel assume a management responsibility when providing 194 internal audit services to an audit client, the threat created would be so significant that no safeguards could reduce the threat to an acceptable level. Accordingly, a firm’s personnel shall not assume a management responsibility when providing internal audit services to an audit client. 290.197 Examples of internal audit services that involve assuming management responsibilities include: • Setting internal audit policies or the strategic direction of internal audit activities; • Directing and taking responsibility for the actions of the entity’s internal audit employees; • Deciding which recommendations resulting from internal audit activities shall be implemented; • Reporting the results of the internal audit activities to those charged with governance on behalf of management; • Performing procedures that form part of the internal control, such as reviewing and approving changes to employee data access privileges; • Taking responsibility for designing, implementing and maintaining internal control; and • Performing outsourced internal audit services, comprising all or a substantial portion of the internal audit function, where the firm is responsible for determining the scope of the internal audit work and may have responsibility for one or more of the matters noted in (a)– (f). 290.198 To avoid assuming a management responsibility, the firm shall only provide internal audit services to an audit client if it is satisfied that: (a) The client designates an appropriate and competent resource, preferably within sen...
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This document was uploaded on 04/03/2014.

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