Safeguard

Question 1

Safeguard

Answer 1

Here are the smart notes:

Safeguards

Definition
Safeguards are actions taken to reduce threats to compliance with fundamental principles to an acceptable level.

Acceptable Level
An acceptable level is when a chartered accountant concludes they comply with fundamental principles, using the reasonable and informed third-party test.

Reasonable and Informed Third-Party Test
This test considers whether another party would likely reach the same conclusion, helping chartered accountants assess the effectiveness of safeguards.