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A summary list of the explicit prohibitions in the Code is provided below. This list details those provisions that contain a "shall not" statement and is a subset of the Requirements set out in the Code.  

A professional accountant is required to apply the principles-based provisions in the conceptual framework set out in Section 120 to identify, evaluate and address threats to compliance with the fundamental principles of ethics and, where applicable, to independence. These explicit prohibitions are the result of the IESBA applying that conceptual framework to certain situations and determining that threats to compliance with the fundamental principles are at a level at which actions or safeguards cannot be applied. Accordingly, the activity, interest or relationship is prohibited by the Code.  This list should not be viewed as all-inclusive because the application of the conceptual framework might result in the professional accountant concluding that the threats created by a particular situation can only be addressed by declining or ending the specific professional activity.

Some of these prohibitions apply to audits of entities that are public interest entities only.

 

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INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > RECENT SERVICE WITH AN AUDIT CLIENT

R522.3

The audit team shall not include an individual who, during the period covered by the audit report: Had served as a director or officer of the audit client; or Was an employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion. ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > SERVING AS A DIRECTOR OR OFFICER OF AN AUDIT CLIENT

R523.3

A partner or employee of the firm or a network firm shall not serve as a director or officer of an audit client of the firm....

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > SERVING AS A DIRECTOR OR OFFICER OF AN AUDIT CLIENT

R523.4

A partner or employee of the firm or a network firm shall not serve as Company Secretary for an audit client of the firm, unless: This practice is specifically permitted under local law, professional rules or practice; Management makes all relevant 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. ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > EMPLOYMENT WITH AN AUDIT CLIENT

R524.4

The firm shall ensure that no significant connection remains between the firm or a network firm and: A former partner who has joined an audit client of the firm; or A former audit team member who has joined the audit client, if either has joined the audit client as: A director or officer; or An employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > EMPLOYMENT WITH AN AUDIT CLIENT

R524.6

Subject to paragraph R524.8, if an individual who was a key audit partner with respect to an audit client that is a public interest entity joins the client as: A director or officer; or An employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion, independence is compromised unless, subsequent to the individual ceasing to be a key audit partner: The ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > EMPLOYMENT WITH AN AUDIT CLIENT

R524.7

Subject to paragraph R524.8, if an individual who was the Senior or Managing Partner (Chief Executive or equivalent) of the firm joins an audit client that is a public interest entity as: A director or officer; or An employee in a position to exert significant influence over the preparation of the client’s accounting records or the financial statements on which the firm will express an opinion, independence is compromised, unless twelve months have passed since the individual was the ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > TEMPORARY PERSONNEL ASSIGNMENTS

R525.4

A firm or network firm shall not loan personnel to an audit client unless: Such assistance is provided only for a short period of time; The personnel are not involved in providing non-assurance services that would not be permitted under Section 600 and its subsections; and The personnel do not assume management responsibilities and the audit client is responsible for directing and supervising the activities of the personnel. ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > LONG ASSOCIATION OF PERSONNEL (INCLUDING PARTNER ROTATION) WITH AN AUDIT CLIENT

R540.5

Subject to paragraphs R540.7 to R540.9, in respect of an audit of a public interest entity, an individual shall not act in any of the following roles, or a combination of such roles, for a period of more than seven cumulative years (the “time-on” period): The engagement partner; The individual appointed as responsible for the engagement quality control review; or Any other key audit partner role. After the time-on period, the individual shall serve a “cooling-off” period in accordance ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > LONG ASSOCIATION OF PERSONNEL (INCLUDING PARTNER ROTATION) WITH AN AUDIT CLIENT

R540.20

For the duration of the relevant cooling-off period, the individual shall not: Be an engagement team member or provide quality control for the audit engagement; Consult with the engagement team or the client regarding technical or industry-specific issues, transactions or events affecting the audit engagement (other than discussions with the engagement team limited to work undertaken or conclusions reached in the last year of the individual’s time-on period where this remains relevant to the audit); Be responsible for leading or ...

INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS > PROVISION OF NON-ASSURANCE SERVICES TO AN AUDIT CLIENT

R600.7

A firm or a network firm shall not assume a management responsibility for an audit client....

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