Chapter 9 - Ethics S2 Financial business, employment and personal relationships Flashcards
Can shares be held in the client by the audit firm?
What are the threats?
No
Self interest threat
Can the audit firm make loans to the client?
What are the threats?
No
Self interest, Intimidation
Can the audit firm accept loans from the client?
What are the threats?
No
Self interest, intimidation
Can the audit firm enter business relationships with the client?
What are the threats?
No
Self interest, advocacy, intimidation
Is dual employment allowed?
What are the threats?
No
Management
Self review
Are loan staff assignments allowed?
What are the threats?
What are the Safeguards?
Management, self review
No role in audit about work they did
What actions should be taken if a member of the audit firm has potential employment with the client?
What are the threats?
Member should notify firm
Firm removes individual from work and review individual’s work
Self interest, familiarity, intimidation
What actions if audit partner leaves to become director/key management in client firm?
Resign as auditor for 2 years
What actions if any other member leaves to become director/key management in client firm?
Consider composition of audit team
What actions if close family member in client firm?
What are the threats?
Remove from team
Report to partner
Familiarity, Self interest, Intimidation
Can audit partner/employee perform the role of director?
What are the threats?
No
Management, Self review
What actions if a director or employee of the client firm joins the audit firm?
They cannot work on audit for 2 years
