Work Environment Safeguards in Assurance

Study Notes

Firm-wide safeguards and engagement-specific safeguards are two types of work environment safeguards.
Examples of firm-wide safeguards include:
- Leadership that stresses compliance with fundamental principles.
- Policies and procedures to implement and monitor quality control of engagements.
- Documented policies regarding identifying threats to compliance with fundamental principles.
- Policies and procedures to monitor and manage reliance on revenue from a single client.
- Using different partners and engagement teams for non-assurance services to an assurance client.
- Policies and procedures to prohibit inappropriate influence on the outcome of an engagement.
- Timely communication of firm policies and procedures to all partners and staff.
- Designating a senior manager to oversee the quality control system.
Examples of engagement-specific safeguards include:
- Having a Professional Accountant in Public Practice (PAPP) review non-assurance work.
- Consulting an independent third party, such as a committee of independent directors or another PAPP.
- Discussing ethical issues with those charged with governance of the client.

Integrity implies fair dealing and truthfulness.
An auditor should not be associated with reports or information that contains false or misleading statements.
An auditor should take steps to disassociate from such information when aware of it.

Objectivity means not allowing bias, conflict of interest, or undue influence to override professional or business judgments.

Requires maintaining professional knowledge and skill to ensure competent services.
Imposes obligations to:
- Maintain professional knowledge and skill.
- Act diligently in accordance with applicable technical and professional standards.

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