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Independence for assurance engagements.

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PositionETHICS - Ethical guidelines for financial professionals

The following notes apply to all members in practice when performing assurance engagements. They arise from the need to be independent in mind and appearance when carrying out such engagements and are supported by the current ethical guidelines. A fuller note, including examples of threats and safeguards, is available on CIMA's website. A new code of ethics will be adopted later this year, incorporating the meaning of this statement.

It is clear, and in the public interest, that members of assurance teams and firms should be independent of assurance clients. This is necessary to maintain objectivity when performing assurance engagements--such engagements are intended to enhance the credibility of information about a subject by evaluating whether it conforms in all material respects to suitable criteria.

The evaluation of threats to independence and subsequent action should be supported by evidence obtained both before accepting the engagement and while it is being performed. The obligation to make such an evaluation and take action arises when a firm or a member of the assurance team knows, or could reasonably be expected to know, of circumstances or relationships that might compromise independence. There may be occasions when there is an inadvertent violation. If an inadvertent violation occurs, it would generally not compromise independence, providing that the firm has appropriate quality-control policies and procedures in place to promote independence--and that, once...

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