Revised Code of Ethics in the Phils - 2010

With governance temporary staff assignments 290142

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Unformatted text preview: when entering employment negotiations with the client. On receiving such notification, the significance of the 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 individual from the audit team; or • A review of any significant judgments made by that individual while on the team. Audit Clients that are Public Interest Entities 290.139 Familiarity or intimidation threats are created when a key audit partner joins the audit client that is a public interest entity as: (a) A director or officer of the entity; or (b) An employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion. Independence would be deemed to be compromised unless, subsequent to the partner ceasing to be a key audit partner, the public interest entity had issued audited financial statements covering a period of not less than twelve months and the partner was not a member of the audit team with respect to the audit of those financial statements. 290.140 An intimidation threat is created when the individual who was the firm’s Senior or Managing Partner (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. 180 290.141 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; (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...
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