Introduction (923.1 to 923.2)
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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.

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Serving as a director or officer of an assurance client creates self-review and self-interest threats. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

Requirements and Application Material

Service as Director or Officer (R923.3)
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A partner or employee of the firm shall not serve as a director or officer of an assurance client of the firm.

Service as Company Secretary (R923.4 to 923.4 A1)
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A partner or employee of the firm shall not serve as Company Secretary for an assurance client of the firm unless:

  • This practice is specifically permitted under local law, professional rules or practice;

  • Management makes all decisions; and

  • The duties and activities performed are limited to those of a routine and administrative nature, such as preparing minutes and maintaining statutory returns.

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923.4 A1

The position of Company Secretary has different implications in different jurisdictions. Duties might range from: administrative duties (such as personnel management and the maintenance of company records and registers) to duties as diverse as ensuring that the company complies with regulations or providing advice on corporate governance matters. Usually this position is seen to imply a close association with the entity. Therefore, a threat is created if a partner or employee of the firm serves as Company Secretary for an assurance client. (More information on providing non-assurance services to an assurance client is set out in Section 950, Provision of Non-assurances Services to an Assurance Client.)

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