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Hello Miss, I would like to ask from professional perspective rather than on ethical perspective, the audit team member is required to inform aufit engagement partner about the financial interest in the client business, will it includrd the loan borrowing from the audit staff from client either the client is not a banking or lending business or only refer to the potential shareholding on the client business? Thank you.
In practice, an audit firm will require all professional staff (sometimes ALL staff, not just professional) to sign an annual declaration concerning all relationship – financial/business/personnel with audit clients (list provided for reference) and officers of audit clients (sometimes any staff member of an audit client). This then means that the managing partner/manager responsible for assigning staff to client engagements is aware of all potential conflicts – e.g. if a team member on an audit client were to fall ill and had to be replaced at short notice.
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