Independence practices

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Grant Thornton International independence team
Ethics and quality control manual
Relationship checking

There are multiple layers of control designed to monitor compliance with the independence policies, applicable rules and the IFAC Code of Ethics. At the international level, policy requires member firms to identify a partner with responsibility for independence matters, provision of training and obtaining annual confirmations of independence from all professional personnel. Member firms are also required to maintain a listing of companies considered “restricted” as a result of an audit relationship either with the company or a related company. Those restricted companies that have publicly traded securities are required to be posted no less than monthly to a global restricted list through a system maintained by Grant Thornton International.

Grant Thornton International independence team
The global independence team comprises five full time personnel led by the executive director – risk and regulatory matters. The compliance monitoring responsibilities reside with the executive director and the two most experienced members of this team. Personnel are selected for these assignments based upon a combination of previous experience in compliance and independence positions and their capacity for working effectively in a global environment. Members of this team are also expected to be highly proficient in Grant Thornton International policies and international independence regulations. Where necessary the team consults with national experts within member firms on national independence rules.

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Ethics and quality control manual
One of the criteria for membership within Grant Thornton International is that member firms and their personnel must comply with the International Federation of Accountants’ (IFAC) Code of Ethics and the International Standard on Quality Control (ISQC) 1, or local requirements if these are stricter. While the focus of ISQC 1 is on the provision of assurance services, it also addresses certain requirements for member firm governance and oversight that are relevant to all service lines.

During 2007, Grant Thornton International issued a new Ethics and Quality Control Manual to all member firms. The manual includes policies that comply with the latest versions of the IFAC Code of Ethics and ISQC 1 together with Grant Thornton International policy on independence and ethical matters relevant to all member firm personnel.

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Relationship checking
Professional standards require that member firms and professional personnel from all service lines maintain their objectivity when delivering services to clients. This objectivity can be threatened when two different services are delivered to the same client (such as recovery and reorganisation – specifically insolvency services – and audit, or representing opposing sides of a dispute as litigation support clients). For assurance services and some other service lines, maintaining independence from the client is under applicable professional standards an essential element of objectivity.

Conducting reviews for potential conflicts of interest and/or threats to independence, (jointly referred to as “relationship checks”) prior to proposing on an engagement are important safeguards against these threats to objectivity. Grant Thornton International has instituted a policy that establishes a standardised approach to conducting these checks for potential relationships where the member firm client or prospective client has international operations.

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