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Independent minds

Different independence and objectivity requirements for different types of engagements can cause confusion. Madeleine Fone provides some clarification.

Question: Audit, assurance review or non-assurance engagements: how do relationships affect independence and objectivity requirements?

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While some readers will be able to give the short answer to this question off the top of their head, this is an area where more detailed answers can surprise some callers to the Ethics Advisory Services helpline.

The short answer is: although the level of assurance may be different for audit and assurance engagements, the level of independence does not differ significantly.

While independence is not required for non-assurance engagements, objectivity is  nevertheless a fundamental principle of the ICAEW Code of Ethics for all engagements. Hence the firm must maintain objectivity in its approach to the compilation assignment.

The long answer depends on various criteria, including the relationships between members of the firm, the client, and connections such as family members.

This is an extract from an article in the April 2014 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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