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July 5, 2020 at 5:05 pm
Hi. I have a question. If a firm has two separate departments e.g. Taxation and Audit. Tax department has a client and the same client now wants the same firm to audit its financial statements. Can the Audit department accept the engagement? Is there any self review threat? Or can we apply any safeguards?
Kim Smith says
July 5, 2020 at 5:17 pm
To be assured a timely response please post such technical queries to the ask AAA tutor forum.
Yes – when considering whether to accept the audit, the firm would have to consider the self-review threat if the results of the tax service have implications for the financial statements. See in the notes that separate teams providing each service would be a safeguard whether providing the service is permitted. It would not be permitted to provide tax service to an audit client where “Giving tax (or corporate finance advice) depends on a particular accounting treatment and has consequences that are material to the financial statements.” In this case NO safeguards would be sufficient to reduce the threat to an acceptable level – so the firm could only continue to provide the tax services OR audit – not both.
December 19, 2019 at 3:53 am
Hello, Where can i find the exmaple NEESON?
January 7, 2020 at 10:19 pm
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