All 18 Ethics & Independence questions
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What is integrity in the context of auditing? What are the main threats to auditor independence? What safeguards can mitigate threats to independence? How do audit fees create threats to independence? 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? What are the rotation requirements for auditors of public interest entities? What is an Engagement Quality Control Review (EQCR/EQR) and when is it required?
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Auditing & Assurance › Ethics & Independence

What is a familiarity threat and how is it managed?

Intermediate

Answer

A familiarity threat arises from a long or close relationship with a client (long partner tenure, close personal ties, former staff now at the client) that may erode skepticism and objectivity. It's managed through partner and staff rotation, cooling-off periods before joining a client, independent reviews, and policies on personal relationships.
Real-world example A partner who has served the client for many years is rotated off to counter the familiarity threat.

Common follow-ups: What is a cooling-off period? | Why does long tenure threaten objectivity?

Ethics & Independence Audit Objectives & Types ISA Standards
All 18 Ethics & Independence questions