A chartered accountant who intends to use the work of others, whether internal or external to the employing organization, or other organizations shall exercise professional judgment to determine the appropriate steps to take, if any, in order to fulfill the responsibilities set out in paragraph R220.4. 220.7 A1 Factors to consider when a chartered accountant intends to use the work of others include: • The reputation and expertise of, and resources available to, the other individual or organization. • Whether the other individual is subject to applicable professional and ethics standards. Such information might be gained from prior association with, or from consulting others about, the other individual or organization.
Using the Output of Technology
A chartered accountant who intends to use the output of
technology, whether that technology was developed internally or provided by third parties, shall exercise professional judgment to determine the appropriate steps to take, if any, in order to fulfill the responsibilities set out in paragraph R220.4. 220.8 A1 Factors to consider when a chartered accountant intends to use the output of technology include: • The nature of the activity to be performed by the technology. • The expected use of, or extent of reliance on, the output of the technology. • Whether the accountant has the ability, or has access to an expert with the ability, to understand, use and explain the technology and its appropriateness for the purpose intended. • Whether the technology used has been appropriately tested and evaluated for the purpose intended. • Prior experience with the technology and whether its use for specific purposes is generally accepted. • The employing organization’s oversight of the design, development, implementation, operation, maintenance, monitoring, updating or upgrading of the technology. • The controls relating to the use of the technology, including procedures for authorizing user access to the technology and overseeing such use. • The appropriateness of the inputs to the technology, including data and any related decisions, and decisions made by individuals in the course of using the technology.
Addressing Information that Is or Might be Misleading
When the chartered accountant knows or has reason to
believe that the information with which the accountant is associated is misleading, the accountant shall take appropriate actions to seek to resolve the matter. 220.9 A1 Actions that might be appropriate include: • Discussing concerns that the information is misleading with the chartered accountant’s superior and/or the appropriate level(s) of management within the accountant’s employing organization or those charged with governance, and requesting such individuals to take appropriate action to resolve the matter. Such action might include: o Having the information corrected. o If the information has already been disclosed to the intended users, informing them of the correct information. • Consulting the policies and procedures of the employing organization (for example, an ethics or whistle-blowing policy) regarding how to address such matters internally. 220.9 A2 The chartered accountant might determine that the employing organization has not taken appropriate action. If the accountant continues to have reason to believe that the information is misleading, the following further actions might be appropriate provided that the accountant remains alert to the principle of confidentiality: • Consulting with: o The Institute. o The internal or external auditor of the employing organization. o Legal counsel. • Determining whether any requirements exist to communicate to: o Third parties, including users of the information. o Regulatory and oversight authorities.
If after exhausting all feasible options, the chartered
accountant determines that appropriate action has not been taken and there is reason to believe that the information is still misleading, the accountant shall refuse to be or to remain associated with the information. 220.10 A1 In such circumstances, it might be appropriate for a chartered accountant to resign from the employing organization.
220.11 A1 The chartered accountant is encouraged to document: • The facts. • The accounting principles or other relevant professional standards involved. • The communications and parties with whom matters were discussed. • The courses of action considered. • How the accountant attempted to address the matter(s).
220.12 A1 Where threats to compliance with the fundamental principles relating to the preparation or presentation of information arise from a financial interest, including compensation and incentives linked to financial reporting and decision making, the requirements and application material set out in Section 240 apply. 220.12 A2 Where the misleading information might involve non- compliance with laws and regulations, the requirements and application material set out in Section 260 apply. 220.12 A3 Where threats to compliance with the fundamental principles relating to the preparation or presentation of information arise from pressure, the requirements and application material set out in Section 270 apply. 220.12 A4 When a chartered accountant is considering using the work of others or the output of technology, a consideration is whether the accountant is in a position within the employing organization to obtain information in relation to the factors necessary to determine whether such use is appropriate.
