Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › threats
- This topic has 1 reply, 2 voices, and was last updated 8 years ago by Ken Garrett.
- AuthorPosts
- April 24, 2016 at 3:44 pm #312502
Sir could explain this point its confusing
Assuming management responsibilities for an assurance client may
create threats to independence. The provision of other services may
require the assurance firm to assume management responsibilities
but an assurance firm must not assume management
responsibilities as part of an assurance engagement or for an
audit client.
– Activities that are routine and administrative, or involve matters
that are insignificant, generally are deemed not to be a
management responsibility.
– Providing advice and recommendations to assist management
in discharging its responsibilities is not assuming management
responsibilities.April 24, 2016 at 4:13 pm #312505The key difference is between providing advice and making decisions. The latter is management’s responsibility.
So, the audit firm could be asked to evaluate several computerised accounting systems. The firm can set out the pros and cons of each system and could even suggest the best system. However, it must leave it up to management to make the final decision, sign the purchase order etc.
- AuthorPosts
- You must be logged in to reply to this topic.