The provision of accounting and bookkeeping services

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93. The provision of accounting and bookkeeping services of a routine or mechanical nature to divisions or subsidiaries of listed audit clients would not be seen as impairing independence with respect to the audit client provided that the following conditions are met, except a. The services do not involve the exercise of judgment. b. The divisions or subsidiaries for which the service is provided are collectively immaterial to the audit client. c. The services provided are collectively immaterial to the division or subsidiary. d. The fees to the firm, or network firm, from such services are collectively significant. Preparing Accounting Records and Financial Statements – Emergency Situations 94. The provision of accounting and bookkeeping services to audit clients in emergency or other unusual situations, when it is impractical for the audit client to make other arrangements, would not be considered to pose an unacceptable threat to independence provided: a. The firm, or network firm, does not assume any managerial role or make any managerial decisions. b. The audit client accepts responsibility for the results of the work. c. Personnel providing the services are not members of the assurance team. d. All of the above. Valuation Services 95. If the valuation services involves the valuation of matters material to the financial statements and the valuation involves a significant degree of subjectivity, the self-review threat created (choose the incorrect one) 96. The following would not generally create a significant threat to independence, except a. When a firm, or a network firm, performs a valuation service for an audit client for the purposes of making a filing or return to a tax authority. b. The firm provides formal taxation opinions and assistance in the resolution of tax disputes to an audit client. c. The firm renders internal services involving an extension of the procedures required to conduct an audit in accordance with Philippine Standards on Auditing to an audit client. d. When the firm, or a network firm, provides assistance in the performance of a client’s internal audit activities or undertakes the outsourcing of some of the activities.
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Page 16 of 21 Provision of IT Systems Services to Audit Clients
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