Chapter B

WEI CODE OF
PRoFESSIONAL EHHCS
THE ACCOUN&CY AW OF 20 0 4

Adl s tIn ₩"]b I n g of th e

in
mark
e iDf h r e sp on sib m ty to
a c c ou n tin g p m fe ssion is the * o c ep Dnd e
th e p ub lic As
p m fe s s i o m a d a b thle ac c o o nn»
a«'

₩
r e sp on sib ilityis no t
e xc lusine m p m te c t th e of t i n e i r c l i ents
r» mploym mtea+ tj b e-_i nteres t of the pali tm r st be
r h e ir p a r a m ou n t c on c e r n .

.
In tod a y%mo d e m e nviro nme n*
many ₩
e n ts of soc iay
tion m

this
;.
';. Incre asind y d e p e n d e n t for d e c ision -m a kin g o n for
:

wh ic h the y h a ve no c on ttoL
mey b im to p m fe ssion a l acco rmmls
m as s i s tanc e in as s es s i ng th e
r e lia b ility of s o m e of
Eve ry by a n a c c ou n ta n t to mmpyMpmfessinnal
it
d iftic u lt fo r th e p r ofe ssion m m a in ta in th e
. · m a k €s te ptdnion m
o vct h s
#cjmte g tity. o b je ctivity, a n d c o mp etenc e th a t it has
;' ◆
many of W Mce
m th e p ub lic

In or d e r to minm p u b lic trust a md mn& de nc eth c l i c e ou n ta n c y

im

ac c o un, tants must ad here m stm d a a d s 0 €

pmfessio pmmonal
e tb ic a l c on d u c t sta n d u d s of c o nd uc t that emb o d y a nd

'. In ₩ ity, obje c tivity, a n d c on c e r n for th e p u b lic ather dm aek)

b
m Philip p ine
OFAC)is
a
In stitu te of Ce r tiEe d mlic Ac c ou « na=ns

me mb e r of th e Inte rnatio nal Fd e tatio ns of Ac ooitm m a B

a n d co mmitte d m su p p or t th e wo&of UAC
ob ]lg e d
h he
pmA)
m
cm of m P m fe ssion a l Ammtants P h illip p in e s is

m· Em m m fe ssional Acmwm
Eth ic s
th e IPAC Co&of

Me Co d e of Ethics fo r m fe ssiooal Ac c ou n ta n ts in th e p haip p ine s

is d in id e d into tb r e e W P art A m blisbe s fr m d a a n e n ta l pireiplcs
of p mfe ssio nal e tb ic s a n d prom a

p ub l
 s hould re s pe ct the

tk ₩W
A profe s d. ona l a ccotrtua nt a d u n gthe cours e . '
It is imp o ssiblr
to de m
m e ty simatio n tha t cre a tmthre us
to

c o o 6 d e nofwI n fo wdieorvlce n
s md s hould not usc
C Apmce with to ardamental
0

principle s _Conrpmy, tbe

of pe dotmiog ro fessicmd
P -go de, m blis he s a m owna a l o ach tba t rwe s
without prope r m d
m disc]o sie a ny m ch mrma tion a profe s s im acco unmnr to
tbe te is a le g a l m profe s dm

dgin or duty m disclose·

C a m how ot tm le s s
L' Ide m ify m com pm c
Eva lua te
th e m
the
pMplts
a ignffimm of th re a ts
m
ide m im a nd

rna tte r dis clome of

:.-.' ,: 3. A S a fe g u a rd s ; whe n ne m s a ry,to m idra te the th re a ts
CmBde ntia lity is . No t m y
.,
a P P "..
or-rcdm e the m
X
I
to a n,a c c e p ta b le leveL

m ap p ro ach is a im e d . At assMo g the profe s m accam)twms

i n complying with e tbrca lreq uirements md meeting tbe k

.

a c t in the
T esp ° ns ibMty to p6blic inte re s t.

coMde ntid in fiion m a y be dis clos e d with the Fm da m e nta l P r in c ip h )

' unde r circums Mce s :
the · fllowiog
I' #Thre a ts tp Co * a pm cc

in which the p=ofe s s iond a ccounta nts

1. M o s m eis d by the clie m or emp l o y The circumstances
wttb Gmdamemal
2 . -Dis clos ure is 11e qmd by la * mch as com plia nce : o p eratem a y c re a te the a tsto compmcc
mh a 6 ₩
e n a is s u e d by a c(, m in thc cours e of pdnciple s .
ca te gode s :.
S uch th re a ts m into me m mo re of the foMwing

3. Tbe re ]s a prote s s iona l dury 6 r t i g b ttl» dis clos e

S e lf-inte re s q'
W
,'

.
' -mad enti ali nfo rmti o nFor e· xa mple . R he 2. re vim;

I.
dis clos e conhdcntia l
pm fe s s iona la ccouta a qtm a y Advoca cy;
if :;
,' .

_,

'informa tion to de fe nd him qplf ₩ e d by his clie nt 4. Fa mmtiM a nd

4 m cm ploycc I na ddition, a pm fe s s iona la ccounta nt 5. Intim ida tionL
'

m a yalso dis clos ecanlillmmrid. Informa tion to comply

m the qua lity a s s unta ce
=S e m e rm t Th« e a (is
the thre a ttha t a Gnancialo r
otbe

conducte d by-the Bm -.',.''.! :-... be ha vior. Exa m ple s -of

:

a ccounta nt's )udgme nt· ot inclu

:' ckcm s ta nce s tha trnay c re a te s e lf-intm threat indire ct

L fina ncia l intrre s t m a te ria l r

! " ..' , A'dire ct

0 .

(ay.
inte re s itn a clie nt
mt
,

:., Financial
A profe s xiona l a ccouota ni s hould comply re le va nt m my of its
A lo ain or gda mte c to or from
a
]ne s anld tcguia tiom a nd re fia in & om pny'coriduct which (b)

might btiqg d i s c t m
to thc pm fe s s ion. '..

clim
t
 (Q m·
Cm cm m m t h tp o * s iMliry of miqg t h t

c l i e m*

tin a ia
of
mb nc er tbrt

₩ b c mof clie nt in
m rdrom on

m putie *
li Ql i*
rbe p m m l=dwe m m & ot mm Pe rfi)m « d In dhp ute* widb

lo rnaing I rl»o o t tbe s u b i tm a tm of

th e

Ewp k iof b « my mte s e llmim

' c l »nt includc

₩ W e nte
o f ci» c u m s m c e s
Emmp les th« inuindy
be q 1 ot ofBce r of dw c Eat-
₩. or h °w
W
a m m nbrr of dbe e ngiwm e m R am
ima tm roe nbe ot t do se mme mb«
m cxe n di» ect md signiB cam m cr thr
of thc cqgrgcm e nt
(b) of tlu e ogrgtnwut te a m hrm a m
m m
A member

(C) Fbfi« nung scnrio cs m1 tha r dire cth a fte ct immwdimc &mdy mtmm Qr M member

₩u* t i mor ₩ d* m Mgm e rs z cm m p o ritio n m m t dinect m d $4 p i6 mm infhre ncbQver

R
(d) t* thc s u b je c t of& C eag* gcm m
sawunco re ot prcpm Dou of m« reco lds tha t m

m
&C Std\cet mamx of m othe r e nga ge tne nt (C) A form e rp a n n e r of d« m n b e in g
I om
(e ) m the of e na m i wte m s m
₩ iom h-e d io & e ir d e s ig n or
inuplm e nta nm .
duoa m d
MM* et o f thc C
nifua m inm e m e
₩gemctM
w« the mbjcet

m m dis cwuT oF a fica nt e tror m

daring (d ) Long rmci* tioa oE· s e nior me mm of the
acco uaunt in cnga gcm mmw m the clint
P ublic p mctice

Ace tpm of Bi& I o r ptcfctm irl tra m ]cm unless

mountmt m p ro mo « e dim a o r I
lo the mt thu thc tm p lop w
pm fc« iotul a m um ols
c l ==m
 ¢ ccou«
be c*u* e
ant wiu b e de tm e d i rm a cting.
of 9 m l or p r«d vd pte s m te ti.
the p ro M
ce titr

cluding:
O

ely. 1_S=d :

',
s uen
Sdeguudr

1_S a l
fall Mo No btoa d catep der:

m pto

Ri
r.
fessjo q d m
by
*wts wodt
m e td*«, un& im ie m e o ver

ect
m

y
2. S afe in he
Exm pJe r o fcircuwume s M m a te Ms mt tiu
The tirm m tbe of& e lnua c« tc a lm a bonldS cim
include."r__..
m e m b e rs

m
* p p ro p date s a fe g u a a d s m m lnm e ot re d u c e dr« ats, o the£

da
tha n th
(·) Be ing chceitened qritb lidg¥ io s tho se tba t a re clq iwignifica nk m m* ceep nld«

dis* grce me ntwith the a ppli &' d m a n m com ting

=·2 ctca te d by plo m * d ki «B a i *
M ri w.
te gula tim , indude the fo llo wi ₩
principle (' ) Educa tim ¢
(a md

-,=·':.
m m ing

mg pria te ly the e xte m

mjuir
m
prmwe d duclina ppr.
1C)
of ₩ r m e d m a e r b? Je duce fe e s . ', -(b ) CoTtige dnca tion

S =icgmds .
#,

', discip linary p ro cessest a nd

Exte rna l rMe pr o£· m ' s qua Ety comrd s is te m
U thre ts to y (C)

m prin. X
raf
a c mc da
the ou mn
emt al n t ' h : Both qua ntititive
e m tk e nvironm e nt'cooa is t
g

S a kwa rds in
i n
m Ju=litBtive ₩51?
&

& ctm s be co nsidered e va lua ting& ·

₩·
wide sa£ eguatds a nd inga
we o f. Tha e a t once be e n
₩
aYJ T.' " sas
3

i d M &-a n d c rrd m t ap p ro P tn m a
yl hould be .-¢

Firowwidca a gorud· i n h e m c n vu o m
co nsidened md a pplie d W ne cm ₩ ,

ma y imlude

s hould always
Cons ide ra tion be givm to wha t
te a s ona bhm inform e d thind pa rty ha ving kfrowlcdge o f a] 1,
t d e vm i n i o rm a t i including
m safe ₩
rds a pplie d, would

ms m* bly conclude m bc una cce pta ble . T h cc o m i d m t i o n

m be a a cctcd by m a ttpm m ch a s chc a ignilimnce o f the
W tbe na tlue of the e nga gma m m d the s tm cm e of the

618
 of tbe s e . Thr e a t8 a nd the
s iguilica nc«
ide ntifica don a ndthe a pphca tim o fsa[;

mf
bguards D c sm a me mm ot senio r a
m a na gca u«
m e lim ina te or re duce tbe tbre ats , 6 ma. to be
m pons ible £ or @ lim e
Brm'sol of
adeq mm
tha t a re c L m · tlv o f the s wm .
=Ad vi s i n g¥
mtio ning
m crs a nd
=t h o s e i hmmc e m m te lmd e n M &m a nd

e
-t h rE a tai
s d :h e e va lua tion a nd a pplica don of
Publis hd p o m asdl p ro ccd m e ncoura ge
s e nio,
a nd.Erpovrcl s t a f[ ¢o m m '
lev clswithin the fum a ny rm tm g to ,

cmplia nce m
the fwM m t a l pdnciplcs
tha tco ncern thm

* ₩m m t e a tbgna m m a y include

7-to
Eng

re vie w the wolk do tre a t othcrws e a a vls e

t· rctb]l:
is e c s s a rr.
, . Com ulting a n · inde pe nde m
thud pa rty, s m h a s
a
a ·comm L te e of p c n d e Q t a re ctou,
't profe s s iona l re gm m m
body ot a nothe r

of ife c l i m
with go ve ₩ & lme
ce
m
cb ₩ d gove roa nct

d
Disclo sing to

of the clie nt the ·mtun. 0 s e m ic e s prmndd

a ot-
mg
Inrolvmg a nothe r m to pe rform
who o o r m e m be rs o fa n e nga ge me nt't ei i i € meo _
t of
innm ina pproptia tclF inoM " X.'outcome pe tEortn P«
o fthe =R o M rg set1 4 o t ass Lm ce te ₩
engge
'limi m&ltim o fa Erm 's p ° licies a nd
ln a ddition to thc a bove safeguards, profc ssiun a\

,
l i i ai w a ncha W S to thto ac c mtams inpublic pra cdce m y*
l$ n be a b le m re ly on

a llTa 'rm e ts md profe s s iona l s ta f. fI_a nd Safeguards

tha tthe clim t h a s implmclum
s a Lfe gms
a ppropna te tra ining m d e d u mti m
on m ch
rri t h i nt h eclimt'$ a ys te ms m d ptocdqts s ma y
policie s a nd proce dure s .
include

6 21
 re a lis tic tii M 1e fo r the
Wed ag

I
₩₩
1
on
of the le nt.
pe rform a ia ce ·

IW h
me n
control p o l i c i s
nd· re plying to rwe a t=to m bm in te ndm,
* c m p b w with q m t y tho te nde r tha * b¢ fore the
to provide Wma blc accep ting
pmcdure s de s igne d m h the « xia dng
t hat
e nga ge me nt cm ta ct
a s s ura nce t h a ts pe cific e nga g« m e nts a te * ccom ta m m
b e tcqucs ttd m

ccep tcd only whe n the y cm b¢ pcdorme d m a y be m a de a a to wbe tbe r t h u «a te my

cmpe tcntly. profe s rlona l or othe r reaso m wby tb«

W
ap p o intment s m d mr b« a cce pt

A Mc o m
h
p ro fessio nilI a ccountml in
in pt? btic pra ctice who is n th_clim lh
Pt o m o o aa ]m ua ta m t
asked t0 r« pla ct a nothe r profe s s iona l a ccomta nt in
r--'f_k\_:_to
nm
" —' y uJ wtitin& to Inida te m
e xis ting acco If thc propose d·iҰ
public p rac dor who is cm ide ring te nde ring fo t una ble m ioninuiilca tc m
thc e ti«ing mcuountw
m a rga ge m lnt cca rmdy he ld by mothe r profe s s iona l the pr o p o scd a ccom tm t s hould t ry to o b t d n
whcth« r t h m W my m,
a c c m n rainn tp u b [ kpra ctice , h o u l d de te rm 'ine
ptofe gs iona l or othe r,
fo r not a cce pting the e nga ge m e nt s u c has
iMotma do a bo« a ny pos s ible t h l m by o b «
m e a nsmch a s through m quirie s of third p atties m

circum s ta u ce s cha t tttte a re n complia nce with the thos e cha tgcd Mth gove rmmc d the che nL
fonda m e ota l p rincip lm For e xa mplq the re m a y be
to pn» miona l
thre a t a nd d u

S
a com pe te nce
if
profe s s iona l a ccounta nt in public p racdce
a =C O N F L I C T S OF WE R E S T
a cce pts tbc e ng ₩
m e nt be fore knowing a ll the A ptofe s s iona l acco unemt wbtic pta me s hould ta ke
in
pe rtine nt & cE

Appmpria tt m a y include :
rca s om ble step s to
a conflict of inte re s LFor
lc, tha tcould pm c
i mti fym um s ta nce s
a thca t m obje ctivity

m a y b e cwa tcd whe n a profe s s iona la ce oununt

in public

«
pta cdce co ₩
tm dire ctly wi t b · m m or h a s a j o i n t

Dis cus s ing the clie nt'h a fta irs fully a nd fre e ly ve nm e or s im ila r g e m e m with a ma jot compe titor
» M thc e xis ting a ccounta nc of a clicnL A thre a t to obje ctivity ot c o n fi d m a l i t y
ona l a ccomta nt in
m a y also bc crm te d whe n a p t o fe «
Am (be cxis oog a ccounta nt to provide public pra ctice pe r for m & s e rvice s
for clie nts whos e
in dis pwte wiM
kn o w i n fo mr a don on a ny fa cts or intcrctts m in conflict ot the die m m
e mb othm in re la tion to the m a tte r or t ra m c t i o n
in
, tha in thc mcing a ccoun(a n tls

opia io the propos c¢ a cm m ta nt s hould be qucs tim.

*» rate o(be f otc d c m g whe tbcr (0
giving ds e to the
chc
a cce pt thc circum ta nce s
De pe nding upon i n e l t d ethe
c o n m c safeguards
t, s hould ordina ril
a ccoum a nt in bhc
p+
c ti m ₩
p ro fessio nal

6 24
 md o b m n g t b e i tmus e n to · ct i n s uc
a¥m mo e? gm
T

ha
=P }b l i cp n a i mAnm

e » · s pe ci£c
semio e) m
H
prntica inr m Me Ls oa or o rm
a ccoonum t

msp ect
o b d i n tbcit cons m to

m
d
*
p t m m · nHss m inm m a dm
mpbys ica l o fs lwh fHin
s qm ba o
m d mming); aad
conBde nm
m
ga ide h« m members o f th e e trg+g e m e n t

* m US c o fCmfirlrmini. 1;_
eMap m pa rura s o f chc lirm; md
thc ₩
timioo o f s a fcgua ndsby
 (=) m s ka md lo no wledge te qm d for the typ e
of p to fessio aal s e rvic e s involvcdl
' The m'
(b) The lm lof
tra ining e xp« icnce o ftho md Mtute of

'm
p erso ns ue qs s m y e nme d in pe rforming the Tbe o ge of p o aalblc fee a ma m.
ptofe s s iom s e rdce s ;
b a s ta fo r htJw_t_:__
-_-_—— 14 8 the
(C) m tim e ne ce s my occupie d
by e a c h pe rs m
Eee.

mg* gcd j n p erfo rM gthe outcom t or re s ult of the

t r*na* cdo n re vj d
m ce s i nnd p: fes s jona l ia m
be by a a in d e p e n m

4·
tm d p arty.
T h cdegree o f re s porls ibility tha t
thos e aiences e nta il* pcrformg AP P to p riato s a fe g u J u d s my t a m i .'
II
An advame wdttco* gte e na e nt
with the clie nt
The Mt t h «m to-the b m of rmMta tiom
pm fe s s iona la ccm m nt in Public
mctice m a y quore =fe e lowq_tha n m othe r is !
in i tc l f tlot Disdo sure to Inte nde d us e rs of the work
meifijcaJ. Ne vtrthde s s , thm m a y b e a S e w pfotme d by th« pm fe s s iona ]aCemnbU H
iMe re s t thca t m ptofe s s iona l in
m i fthe fee quote dcom
Calle cte a te d
pe te nce a nd
is m low tha t it
public p mctico a nd thc basis of tom une ra doo_

m y bo d ffi c u l to t pe rform (he
e nga ge me nt in
' q unlitycontrol p o llm atud p ro cedwe&
a ccorda nce with
a p'plica blc te cinMc. I md : Re vie w by m o bjective third pmy of thn work
pm& s s iolld st* nduds for tha t prim pe tfotm e d by the pm m ona l acco o ntam im
public

: XX d " "
p ractice
fe g u * rds which m a y be
a dopte d @ mnu Fe e or Com m is s im

=M a ki n g the clie m Rn e a re o f the te rm s o f the I nc e M cirLum s mtlces, a profe s dotta l acco untant
e nga ge me nrm4 in p uricular, the ba s is o o public pra ctice m a y re ce ive t e t e rrafcel or
whicb fees m chuge d m d w hach m t.

r
senrjces a re com m is s ion m ting m a For m m plq whe re
corne d tbe quote d fe c T he profe s s icnd a cca m m t]n public pra ctice do cs
W
.

=A5 ₩ ning
£§
not pmvido the s e rvice rc q m , a fe«
m-h
'
sp emc
a p p ro p M L m d q m e d s ma _be re ce ive d a contlnm g
m thc ta $ lr
a ji6iEGph s iooa l*cm m ta nt
in public wctice
or othe r A profe s s iond a ccommnt in public
-pra ctice nra y rmve a com m is s ion& om a third pa rty
(C.g, a s ofm m V e ndor)in com e ction with the m
Coqti#ge nt fees
ma y give m ro a s e lf-in t e re s t
of goods or s m rice s to a clie nt Acce pting a m
thre a t to re £e na l fe c ot c o m s l o n m a y gjrre ds c to s m
obje ctinity. The s gnifim ce o f s uch
m i n t e rmthre
t a ts to obje ctivity a nd pmfts s iona l
₩
tinwm
de pe nd o n facto rs inclu
com pe tm ce a nd dm c m
 le , i,

om wNols s a a oud
$, ..' mmu a s

s a rm ba r pa z qa pa ds ir js Aq a tp mu 1 1 0M
mJ o 3]
Jo c p o ] o

V.-o Jd ₩ iBm rs ttmmomu m inq nd a a pJz Jd P mo q s V tmxxssajo Jd mmnoJm m lou

ap p i Mdm pz r ilҰ u l mu a # 0 *
U a tnJq aq t
a nqnd m pa wd
m q a iMa Js Tp ua qm
p tno q s

Birwpm n

a JpJtrd S₩ p ln eq pm ptnow
Js jm q puu

( s p m ym l m aP rq JM :
:'.

m e m ds Fp 01 t m wt m

mpJmd H s miD m UDSOH

uorpa tm m q rm a qt F
W Aq ₩1 P md Jo

uz m m d J r Ja qroire uug uo
a qt m e q

ra m ta ird an m s m rs wa o a Jo
,
 m* educed m a n accep table le ve l though the a pplica tion
mcounta nt in public p ractice in!
₩₩
ofs * Te gms ,. profe ris iona ] or re la tio--LJ__
h a n oHe r.
* be idd not*

OF mww AS S ETS
rna yb e He a te d m. 1
famay clm wm or bmin«*
=c us ro DY
O I

A a ccoura a ntin public pra ctice a hould not A prohs iona l·

p io t-do nal ccorla a min pullic
as s ume cus tody o fclie nt m ode s or othm m e ts m s s an
a s m m e s e rviceis p tacdcc who pmm
teq uired to b e inde pe ndm t of the
m do so by Ia w a n¢& B q in com plia oce with a s s u ra n c e clicm 2 80,3
'pcrtniv.
a ny D d i d o
1. ₩
n a l l dutie s im pos e d m a profe s s iona l o bjew whe n, p m ₩
Th« e xis te nm of thre a » m
my p ro Ecssic· na l m"
a m m ta nk in public pra cdce holding s uch a s s e n de pe nd upon the p ai ri m, chtanm of the
e nga ge mm·t * nd m m ture o fthe work mt the
m ho mgo fclie m a s s e ts cre a te ss df-inte re s t threat to p ro fessio nal ac com ta nt in publi C P m ctice is
b e h a n a nd m a y be a m
pe rform 4ng
p ro mo nd inte re s t thre a t
A
HTb s a fe gua rd against
to o b j c c tti y. s uc,h m e a ts , a p ro fessio nal a ccounta nt in public pra c C s hm d
evalmrc the
profe s s iona l a ccoa nm t in public Fa xcticG e nm s te d with s igniG cm ce of ide nti& d th[m a n4 if the y
momy (or otb« m e t s be ) longing to othe rs s hould:
*
Ke e p m msets s e pmmly'fiom pe rs ona ] or m re ducethe m to an le v& S uch

K
accep table s a fcgum m a y
.
T include :

=U se s uch a s s e ts
only m thc purpos e for which the y
=Vi d ra wi n g from the tm m
e nga ge m e nt

gimrPX,..
are inrendd;

At a ll time s , be m d y to a ccount for thos e a s s e ts .

: : Bus inm tcla tions hip
a nd a ny i n c m qdhidcnds or ga ins ge ne ra te ¢ to the

a ny pe rs ons med to m =D isc : ssi? the with h ig bJ· l r ds of

m
g isstle
a ccomting a nd
m a na ge m cmwithin the
Ma lcc a ppropria te . Imluitie s o f the s ource o f s uch =Dip sb g thc is s ue urjth t h m echa ₩d with
a s s e ts
co with a! i mva nr lavrs a nd re gula tions gore m a nce of the climL
He pa m m th« ho lding o f nnd a cmunting for s uch
=I N D E P E N D E N C E

B O B J ECI TVI TY-ALL

S E R VI C E S · Inde pe nde nce i n a m g me a ns m m hia s e d tw
vie w point in M pmce
o f be e uunjm tion m in
A Pm fe s s iona l a ccounta m i n p ublic pra cdce s hould tjne p re p m n o f t b e q o t Ll 0 e nde nce is m mti al₩
e lme nt o f the C P A profe s s ion I f che m s wa nce
<x)ns ide r M e n
ptovi ₩
a ny pmf € ssio nai semce w hcthe r
I
the m a r« [ b t m to
complia nce with cbc fiutda me ocz l
e
₩ gtm e nt to enhance the cre dibdity o fa n i n fo n u a t i o
it i$ im p° rta mtha t usets o fthis inform a tion pctce in·c thc
P WI¢ o f ob}e ctinrity re s ulti#g M m ha ving inte re s ts
6 33
6 32
 as being obkcivo a nd i mp w
'ptofe rs iom l
mAm i f thc re a de rs ¢ Engqe me m PMod
niue m the ma ncia l mtuna n
or no
m not inde pe ndm with resp ect

W
m mm t h «the QAa

m
10 the ir clie n& e m d be inde pe nde ntof the * s e mncee lle m

S e cdm 29 0 of ¢ h¢ Code o fEthi« s ptovidm a & a rne work' rt «n» whm m raa» amce* eima'
e f the e nga ge m e nt
md to
M i d emi me m lua ting mp o nding threats to be gim m p c ri o rm—— e nd*
H:-
₩
i rd dm m I t om the thre a rs(0 indep endence \whe n tlm mce ¢ h
e pon i u o e dt» wbm np ;

t h o ·ppropri* te
safesumds ca pa ble o f
including
t&c thtws m re ducing Hp m t. t0 a n ce pta ble I fthe a s »wmne e nga ge m e ntis e xpta e d to te e m
e limimting '
the pe riod ot the a s s u c a m c e e wgtm e nt m d s_.
le 1 rel.

M m m m p m o finde pe nde nce i.T he indep endence m a wa nce b aec :

wbiche v« com e s
o f m ind a nd cb« inde pmde nce i n a ppe a ra nce . re pq

ownA
c

la de pe nde nce d mi ndb tbe a u d i M spe rce pdon of

bb W o fmind tha t pe rm its In the ca s e of a manm* tmment· u w_·
¢ d·
be q p *esdo m eo nchrsio n mo m bm g a ffe cte d by
pe riod corm d by m s tM emrH =B :-
m e nce ed « oom prom is e profms iona l judgme nt,
m m with inte =ity,
m»* ng m i a d i vi d m m d e xe rcis e

W md ptote s s im skepInde pe nde nce Q Inde pe nde nce R eq ni nmnt

i n· p p e a m c qo a tbc odrcr ha n¢ re fe rs to the p ublic's

pe rce ption o f the pm fe s s iona l a ccounta nt's

L a ll me e s pmvide d by pm fts s im · cm\1 nT ants
It
a.
No t
inde pe nde nce . is the· voida nce of fa cts a nd I *dep endcnce h
would-tcqme qe pcnyce .
ci¢ cuaastimces b* t m m s igniEca nt thht a re a s ona ble the a uditor ptovide s
re q& ire d only whe a e ve t
¢

m inform e d third pe nim i muld ms ona bly conclude ms ura nce Fm thc purpos « o£
th « the k mb i n t c g t i t )\o b j e c m
ti d
vi qprofe s s iona l the p dncip le o f inde pe nde nce . *s s m nce
comp
m
rbqr« ici* m ind be e n cl* s s ia e d i n t othe e nm e ly:
e nga ge m ie ots axe
mm#a te me ut a um nm-· m (oot rcdcte d
mcm ofEthics dm notm yw the pm fe s s iona l a nd non-mdit (mtrict

6m
e
m m a im in i nm e nta l a ttimde ,
indep endence ■ M wte m e m mm the
but profe * d mtl * e c o m m u a hould Us o a void of ine ance t e m dbs m md
t h c t u a mce, i wh i d would doubt
m ia & pe ode a oa
the pmc to '

of t h c *udit glimt.
 m ma ma ume e =grge Mw rbe rc

the m e m bm f be a a nce tra m a nd

rts«
th
.-...' Fann lmm be iode pcnde « o f thc ase
M dis toibutim d the lrpoH is re m e te d to

ce a n] mus t b e inde pe nde nt of tbe assurance

clim t n *ddidou, the & m s hould not bmc
· np m a a e daMa
l ncia ]. Inte re s tln a n a s s u ra n c e

be co nsidered
indile cL
The ta bh be low m m m a riz m tho iodpe nde nce req uirements of

d
diffe rcm m m nce e me a whe the rma tm or inuna ta m Wh tho CP A's

#sjҰ? um l¢ m Fim NeMro rle hterest, the inte re s tmnst bc

Fim in olde r tu
Audit yes im pa k the cP inde pcnde nc
ma tdir (Dor« stcicted) yes
Non-mdit (»nnnco ed) Ym Loa ns a nd gum a ntce s

e ngqgm rntr, m fi n l JJbo rld«*¢

₩
ba» e
arq maleridl. Iina )lLiul
Ums r <»b e * b e r dire d o r in in a n ¢ L ; Jt ¢ rantT rlie nL

Rna nci* l ins timtim m * t ee ace of

c ] i m ' F b o rm t i gWILyxri o CPA*
hde pmdmce m8 the m o m -, fi l h «loa n ot
idiiiinjrN
:

gua ra nte e is i n i m i i a l
m thc & m m d ·wum nm
 MruMnce te a m ha* a ia jiiiinwdta le W mnm
arrurancc m in-a p o m mi nuai 6 c tN

emp lnyea of m a s d u ra n m c m i n i ' mi l i o n

or an

to h n u e i i c i micct
i h o trkatter d thc miwa m

₩'wM_piodw
WIT
was cia iiiy am· which the
T o do
WA
m

indep cnilcp tly in evahiating hia o t hct o wn wm

■ S e rving m:a n ofa ce r o t dire ctor 00

m Boa td of
As «ma m Che nrts

\ndep endcnm of, thc

emp lo yee of a hm T
ofBce r o t a dice w
cML H o w e re r mm
m the boa rd.of a n m s ura a a

the boa rd of a n a s s u ra n c e
m a n m o wc

m_wl mp t
₩·
'CPA's inde pe ndm prolridd tha t
th t mm 6

ot ope tdm· m
puticir» a t, inthe management
a s s &m i m
7

I t is to. De s cribe
impra ctica ble
tba t fa mily
s ignifica nce o f tMe a ts
re la tiotmhips m a y cre a te .
In e va lua ting the
o f tbrca tscre a te dby fa m dy a nd p erso nal
signilicance
the C? A s hould com ide r the
C

ce
tm om hlps ,
o f tbe re m ns hip a nd. Tote _of the fa dily me mbe r

within thc che nL

' 6 38
 qm
6m ci*
tir· Pofo rtWb mmo twe . i tis ₩trire d
l stafwsats
otaaed
Rphe n
auditing

a*
Proria im of
Whe n ptoriding
il W
m
B emices m m assunnm dlca L
is inrpor u n [ t o m a ke a dis tinctim be twe m
m
ac
₩e ge m w least
moca cy s m ric« a&riso ry
tba t Iga d i

■ Provis ion o f a ccouJrting

a nd
cie nts .
book]Ee cping rm
Ac ti ng =ma droca re of a n a ndit rilpm
a m oum im ohcd is mhwmthe
i nthe
6 6 -a ie . m Bbga tion whe re the
fina ncia l
mc m m a s s ura nce
S ta te m e n ts of an
ms
a ndkmm_imp ih qc
i nd ep en t l e n qthc m sbo uld. No t pe dorm
this ln» o of suvice m aa mJ&t clm

o nthe othe r h» nA, W m m Ar

m l
s e rric e s m a uppm
clie nt h &e e xe cm ion of ine ma ra a ina * kg?
contra a 1due We nce a nd
adrice.

safegu5tua a re e m ploye d.
pm vjde d adeq uate

o ft h e ' wM
cm m proriding asstllajjLe

m;
=Th e 6tm doe s not a s s ume o r m a ke a ny a re not compa tibk
de cis im ; a nd

=P c rs o m d prmiding the s e rvice s a re not

the a s «lmnce te a m ■ R emti ngS e nior Ma na ge « nt
of

■ P rm i s i mo f ttim s e rvice s to a s s ura nce Thc rmuitmmt oE

clie n ts
m s ura llce che a t 'K

P rm i s i o n
of ta xa tim s e rvice s s uch a s ta x =na ting s e rm =t t vwi n g 'k;
₩ C liaJo cq pla noing, provis ion of ta mtion opinions
m
a nd m s is ta ncem thc re s olMa n ta x dis pute s
jt ld d a t e
of

mt im₩ we WA
 ■ Ac tual md aamed
l i d g i o inToining
n tba m m a nua m be ot E the

thlma The
e lf-inwre s t lind Intimida don
te la tiom bip be twe e nthe CP A
anA &e r lm

₩ not M whe n

d.
S meha relatio iJy

Me
clie nvs

nm m m
pla m tbe CP A a nd the
litiptioo
m He a R OA
m a na ge m e in
in liti ₩ ionM nt
a cEe nt siruatio o

to & te rm ine wtue tbe r dm ii£ca noe

h-fwda mdltdl P nnup K \

ct
bre d by a com or othe r public rnthoritv Ob w
1 r+
y
=de te rmine d bme d o n the £e s t trs judicial or
-C ld e m o lltH
g °re m m e m a gmy p ro ceedings-
,

m m mp i ta l i ty
A a ccommnt s hould ne ithe r accep t nm
p ro fessio nal
re a s ona bl
offe r gfis m e a trtta inm e m which mght
be bchrvcd. m ha re a s igmfica nt a nd imprope r
₩ nt o r with
tbm the y de d m
ina ue a ce m the ir wfe s m a ] iud
A profe s s iona l a ccotm ta nt%
a cce pta nm o f m ore tha n. a
mwa na a i o r he r inde wde nce .