Exposure Draft - ACRA

CODE OF PROFESSIONAL CONDUCT AND ETHICS FOR PUBLIC ACCOUNTANTS
290.182 Services involving an extension of the procedures required to conduct a financial
statement audit in accordance with International Standards on Auditing would not be
considered to impair independence with respect to the audit client provided that the
firm‘s or network firm‘s personnel do not act or appear to act in a capacity equivalent to
a member of audit client management.
290.183 When the firm, or a network firm, provides assistance in the performance of a financial
statement audit client‘s internal audit activities or undertakes the outsourcing of some
of the activities, any self-review threat created may be reduced to an acceptable level
by ensuring that there is a clear separation between the management and control of the
internal audit by client management and the internal audit activities themselves.
290.184 Performing a significant portion of the financial statement audit client‘s internal audit
activities may create a self-review threat and a firm, or network firm, should consider
the threats and proceed with caution before taking on such activities. Appropriate
safeguards should be put in place and the firm, or network firm, should, in particular,
ensure that the audit client acknowledges its responsibilities for establishing,
maintaining and monitoring the system of internal controls.
290.185 Safeguards that should be applied in all circumstances to reduce any threats created to
an acceptable level include ensuring that:
(a)
(b)
(c)
(d)
(e)
(f)
The audit client is responsible for internal audit activities and acknowledges its
responsibility for establishing, maintaining and monitoring the system of internal
controls;
The audit client designates a competent employee, preferably within senior
management, to be responsible for internal audit activities;
The audit client, the audit committee or supervisory body approves the scope, risk
and frequency of internal audit work;
The audit client is responsible for evaluating and determining which
recommendations of the firm should be implemented;
The audit client evaluates the adequacy of the internal audit procedures performed
and the findings resulting from the performance of those procedures by, among
other things, obtaining and acting on reports from the firm; and
The findings and recommendations resulting from the internal audit activities are
reported appropriately to the audit committee or supervisory body.
290.186 Consideration should also be given to whether such non-assurance services should be
provided only by personnel not involved in the financial statement audit engagement
and with different reporting lines within the firm.
Provision of IT Systems Services to Financial Statement Audit Clients
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