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What is a self-review threat, with an example? What is confidentiality and when can it be overridden? What is objectivity and how does it differ from independence? What is integrity in the context of auditing? What safeguards can mitigate threats to independence? How do audit fees create threats to independence? What is a familiarity threat and how is it managed? How does the conceptual framework approach to ethics work? What is an advocacy threat, with an example? What financial and business relationships threaten independence?
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Auditing & Assurance › Ethics & Independence

What are the main threats to auditor independence?

Intermediate

Answer

The Code identifies five threat categories: self-interest (financial or other interest, e.g., fees, shares), self-review (auditing one's own prior work), advocacy (promoting a client's position), familiarity (close/long relationship reducing skepticism), and intimidation (pressure, actual or perceived). Auditors identify threats and apply safeguards or decline the work.
Threats: Self-interest, Self-review, Advocacy, Familiarity, Intimidation.
Real-world example Providing bookkeeping and then auditing the same records creates a self-review threat the firm must avoid or safeguard.

Common follow-ups: Give an example of a familiarity threat. | What is a self-review threat?

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All 18 Ethics & Independence questions