12 Questions
What is one example of an engagement-specific safeguard to address threats?
Involving another firm to perform part of the engagement work
Which aspect may lead to changes in the level of threat or conclusions about safeguards effectiveness?
Merging or listing of the client
What is the role of an appropriate reviewer who was not a member of the team in addressing threats?
To review and advise on the work performed to address self-review threat
How might using different partners and engagement teams for non-assurance services help address threats?
It mitigates advocacy or familiarity threats
Which action could help address a self-interest threat?
Not disclosing any referral fees received from clients
What change in facts or circumstances could potentially alter conclusions about safeguards addressing threats?
The involvement of an additional firm in part of the engagement
What is the main purpose of applying the conceptual framework as per the text?
To evaluate threats to compliance
Which category of services offered by professional accountants involves expressing an opinion to enhance user confidence?
Assurance engagements
Why might threats to objectivity be more significant in assurance engagements compared to non-assurance engagements?
Due to the nature of the services offered
What is one reason why threats arising on non-assurance engagements should not be ignored?
They can impact the reputation of the accountant
In which area do professional accountants need to evaluate whether threats are at an acceptable level?
Conditions, policies, and procedures that impact evaluation
Which section of the code applies to all professional accountants in public practice?
Section 300
Study Notes
Addressing Threats
- One example of an engagement-specific safeguard to address threats is modifying the engagement team or personnel.
- Changes in facts and circumstances may lead to changes in the level of threat or conclusions about safeguards' effectiveness.
Role of Reviewer
- An appropriate reviewer who was not a member of the team can help address threats by providing an independent perspective.
Threat Mitigation Strategies
- Using different partners and engagement teams for non-assurance services can help address threats.
- Rotating team members or using a different team can help address a self-interest threat.
Threat Evaluation
- Professional accountants need to evaluate whether threats are at an acceptable level in the specific engagement or service.
Code of Conduct
- Section 290 of the code applies to all professional accountants in public practice.
Conceptual Framework
- The main purpose of applying the conceptual framework is to identify, evaluate, and address threats to compliance with the fundamental principles.
Assurance and Non-Assurance Engagements
- Threats to objectivity might be more significant in assurance engagements compared to non-assurance engagements because of the higher level of assurance provided.
- Threats arising on non-assurance engagements should not be ignored because they can still impact the professional accountant's objectivity and independence.
Services and Opinions
- One category of services offered by professional accountants involves expressing an opinion to enhance user confidence, such as assurance services.
Learn how to identify threats to compliance with fundamental principles, evaluate their significance, and address them using safeguards in professional accountancy. This section focuses on Section 300 of the code, which applies to all professional accountants in public practice.
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