All 18 Ethics & Independence questions
More in Ethics & Independence
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 are the main threats to auditor 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? What are the rules on providing non-audit services to audit clients?
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Auditing & Assurance › Ethics & Independence

What safeguards can mitigate threats to independence?

Intermediate

Answer

Safeguards reduce threats to an acceptable level: those created by the profession/regulation (standards, monitoring, education, licensing) and those in the firm/engagement (rotation of partners, independent quality reviews (EQCR), separating teams, policies prohibiting certain services, consultation). If no safeguard can reduce a threat sufficiently, the auditor declines or withdraws.
Real-world example To counter a familiarity threat from a long tenure, the firm rotates the engagement partner and adds an independent review.

Common follow-ups: What is partner rotation for? | What if safeguards are insufficient?

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All 18 Ethics & Independence questions