Exposure Draft - ACRA

CODE OF PROFESSIONAL CONDUCT AND ETHICS FOR PUBLIC ACCOUNTANTS
(a) Being threatened with dismissal or replacement in relation to a client engagement.
(b) Being threatened with litigation.
(c) Being pressured to reduce inappropriately the extent of work performed in order to
reduce fees.
200.9 A public accountant may also find that specific circumstances give rise to unique
threats to compliance with one or more of the fundamental principles. Such unique
threats obviously cannot be categorized. In either professional or business relationships,
a public accountant should always be on the alert for such circumstances and threats.
200.10 Safeguards that may eliminate or reduce threats to an acceptable level fall into two
broad categories:
(a)
(b)
Safeguards created by the profession, legislation or regulation; and
Safeguards in the work environment.
Examples of safeguards created by the profession, legislation or regulation are
described in paragraph 100.12 of Part A of this Code.
200.11 In the work environment, the relevant safeguards will vary depending on the
circumstances. Work environment safeguards comprise firm-wide safeguards and
engagement specific safeguards. A public accountant should exercise judgment to
determine how to best deal with an identified threat. In exercising this judgment a
public accountant should consider what a reasonable and informed third party, having
knowledge of all relevant information, including the significance of the threat and the
safeguards applied, would reasonably conclude to be acceptable. This consideration
will be affected by matters such as the significance of the threat, the nature of the
engagement and the structure of the firm.
200.12 Firm-wide safeguards in the work environment may include:
(a) Leadership of the firm that stresses the importance of compliance with the
fundamental principles.
(b) Leadership of the firm that establishes the expectation that members of an
assurance team will act in the public interest.
(c) Policies and procedures to implement and monitor quality control of engagements.
(d) Documented policies regarding the identification of threats to compliance with the
fundamental principles, the evaluation of the significance of these threats and the
identification and the application of safeguards to eliminate or reduce the threats,
other than those that are clearly insignificant, to an acceptable level.
(e) For firms that perform assurance engagements, documented independence
policies regarding the identification of threats to independence, the evaluation of
the significance of these threats and the evaluation and application of safeguards to
See Definitions.
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