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Hello sir ,
Regard the management threat , they mention in the answer that if the firm assume managment responsibilities no safeguard can reduce the threat (my thought was its fine for owner managed companies to provide business advice but with safeguards such as having separate teams )
Then they mention in the answer “ if the audit appointment is accepted , Chester & co may wish to obtain written confirmation from management that it acknowledged responsibility for business decisions taken ( clarify this for me please , do they mean that the firm can provide the advices but the final decision should be taken by the client ? If this is yes why before they mention no safeguard can reduce this threat ! )
Thanks in advance
I am not looking at this specific Q but answering in general – to assume management responsibilities and to advise management are two different things. The first is “no can do” – there are no safeguards to reduce this threat to an acceptable level. For the second, safeguards are necessary to ensure that management responsibilities are not assumed.
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