Acca aa s21 Notes

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4. Safeguards
Applying 
safeguards
may be a suitable response to address an identified threat. Other responses are 
to 
eliminate
the source of the threat or 
decline
/end the activity. 
The ACCA Code of Ethics (2019) defines safeguards as "
actions
, individually or in combination, taken 
by the 
professional
accountant
that effectively eliminate threats to compliance with the 
fundamental principles or reduce them to an 
acceptable level
".
A professional accountant’s action is not a safeguard unless it is 
effective
.
The ‘test’ of what is acceptable is whether a “reasonable and well informed party … would be likely to 
conclude that … compliance with the fundamental principles is not compromised”. 
Safeguards vary depending on the facts and circumstances. Examples of actions that might be 
safeguards to address threats include:
๏
Assigning additional time and qualified personnel (e.g. for a self-interest threat).
๏
Having an appropriate reviewer (not a member of the team) review the work performed (for a 
self-review threat).
๏
Using different partners/engagement teams with separate reporting lines for the provision of 
non-assurance services to an audit client (for self-review, advocacy or familiarity threats).
๏
Involving another firm to (re-)perform part of the engagement (for most threats).
๏
Disclosing to clients any referral fees/commission arrangements for recommending services/
products (for a self-interest threat).
๏
Separating teams when dealing with matters of a confidential nature (for a self-interest threat).