Family and Personal Relationships

Introduction

5521.1 Firms are required to comply with the fundamental principles, be independent and apply the conceptual framework set out in Section 5120 to identify, evaluate and address threats to independence. 5521.2 Family or personal relationships with client personnel might create a self-interest, familiarity or intimidation threat. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

Requirements and Application Material

General

5521.3 A1 A self-interest, familiarity or intimidation threat might be created by family and personal relationships between a sustainability assurance team member and a director or officer or, depending on their role, certain employees of the sustainability assurance client. 5521.3 A2 Factors that are relevant in evaluating the level of such threats include: • The individual’s responsibilities on the sustainability assurance team. • The role of the family member or other individual within the client, and the closeness of the relationship.

Immediate Family of a Sustainability Assurance Team Member

5521.4 A1 A self-interest, familiarity or intimidation threat is created when an immediate family member of a sustainability assurance team member is an employee in a position to exert significant influence over the client’s sustainability information on which the firm will express an opinion. 5521.4 A2 Factors that are relevant in evaluating the level of such threats include: • The position held by the immediate family member. • The role of the sustainability assurance team member. 5521.4 A3 An example of an action that might eliminate such a self- interest, familiarity or intimidation threat is removing the individual from the sustainability assurance team. 5521.4 A4 An example of an action that might be a safeguard to address such a self-interest, familiarity or intimidation threat is structuring the responsibilities of the sustainability assurance team so that the sustainability assurance team member does not deal with matters that are within the responsibility of the immediate family member.