International Code of Ethics for Professional Accountants (including International Independence Standards)

Firms are required to comply with the fundamental principles, be independent and apply the conceptual framework set out in Section 120 to identify, evaluate and address threats to independence.

If an assurance team member has recently served as a director or officer or employee of the assurance client, a self-interest, self-review or familiarity threat might be created . This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

A self-interest, self-review or familiarity threat might be created if, before the period covered by the assurance report, an assurance team member:

• Had served as a director or officer of the assurance client; or

• Was an employee in a position to exert significant influence over the subject matter information of the assurance engagement.

For example, a threat would be created if a decision made or work performed by the individual in the prior period, while employed by the client, is to be evaluated in the current period as part of the current assurance engagement.

Factors that are relevant in evaluating the level of such threats include:

• The position the individual held with the client.

• The length of time since the individual left the client.

• The role of the assurance team member.

An example of an action that might be a safeguard to address such a self-interest, self-review or familiarity threat is having an appropriate reviewer review the work performed by the assurance team member.