Scribd
Upload
31 views

CAS 220 - Independence

To assess independence, an auditor must: 1) obtain information from the client to identify any relationships that threaten independence, 2) evaluate any breaches in the client's independence policies and determine if they threaten the auditor's independence, and 3) eliminate or reduce any threats to an acceptable level by applying safeguards or withdrawing from the engagement if threats cannot be addressed. An auditor must be free from any influence that could impair their professional judgement or objectivity and avoid any circumstances that could compromise their integrity, objectivity, or professional skepticism. The audit committee must approve any additional services an auditor provides to ensure their independence is maintained.

Uploaded by

Beeboy CroSel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
31 views

CAS 220 - Independence

To assess independence, an auditor must: 1) obtain information from the client to identify any relationships that threaten independence, 2) evaluate any breaches in the client's independence policies and determine if they threaten the auditor's independence, and 3) eliminate or reduce any threats to an acceptable level by applying safeguards or withdrawing from the engagement if threats cannot be addressed. An auditor must be free from any influence that could impair their professional judgement or objectivity and avoid any circumstances that could compromise their integrity, objectivity, or professional skepticism. The audit committee must approve any additional services an auditor provides to ensure their independence is maintained.

Uploaded by

Beeboy CroSel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

CAS220Independence

Inordertoassessindependence,theauditorandtheirteammust:
1. Obtaininformationfromtheclient(andit'srelatedcompanies),toidentifycircumstances&relationshipsthatthreatenindependence
identifythreatstoindependencebycollectinginformationoncircumstances&relationships
2. Evaluatebreachesintheclient'sindependencepoliciesandproceduresanddeterminewhethertheythreatentheauditor'sindependence
evaluatewhetherornotthreatsaresignificant
3. Eliminateorreducethreatstoanacceptablelevelbyapplyingsafeguards(ifnottheauditorshouldwithdrawfromtheengagement)
identifysafeguardstoapplywhichwouldreducethreatstoalowlevel(ifnot,withdraw)
Independence
Anauditorshouldbefreeofanyinfluence,interestorrelationshipinrelationtotheclientwhichimpairsprofessionaljudgementorobjectivity.
E.g.theycannotownshares,holdaposition,orhaverelativesattheclient'sbusiness.
AsperCAS200,Externalauditorsmustbebothindependentinmindandinappearance.
Independenceinmind
Astateofmindthatconcludeswithoutbeingaffectedbyinfluences(whichcouldcompromiseprofessionaljudgement)andallows
thepractitionertoactwithintergrity,objectivity,andprofessionalskepticism.
Independenceinappearance
Theavoidanceofsignificantcircumstances(thata3rdparty)thatshowthatanauditor'sintegrity/objectivity/professional
skepticismhasbeencompromised.

Ifmanagementaskstheexternalauditortoperformanotherservice/engagement,theauditcommitteehastoapproveit(toensureindependence).
However,theexternalauditorisprohibitedfromsometypesofservicedependingonthecircumstances.

Learntin:CPAProgram
Writtenby:ShahinKachooie

Allrightsreserved.2015MyValueSystemCrewInc.

You might also like