SCHEDULE 1 Requirements for professional ethics, independence, objectivity, confidentiality, auditing standards and audit reporting

3.—(1) Standards must ensure that A takes all reasonable steps to ensure that, in carrying out statutory audit work, A’s independence is not affected by—

(a) any existing or potential conflict of interest; or

(b) any business or other direct or indirect relationship with A or a person having a relevant connection with A.

(2) For the purposes of this paragraph a person has a relevant connection with A if that person—

(a) is a member of A’s network;

(b) is a manager, auditor, employee or other individual whose services are placed at A’s disposal or under A’s control; or

(c) is directly or indirectly linked to A by control.

(3) Standards must ensure that A records in the audit working papers all significant threats to A’s independence and the safeguards applied to mitigate those threats.

(4) In this paragraph “audit working papers” means any documents which are or have been held by A and are related to the conduct of the audit.