AUD 689 - Advanced Auditing Topic 1

Independence of mind and independence in appearance.

When the fees from an audit client represent a large proportion of the firm's total fees, it may lead to self-interest or intimidation threats.

It refers to the state of mind that allows an auditor to make conclusions without being influenced by factors that could impair professional judgment.

<p>It helps avoid situations where an informed third party may perceive a compromise in the auditor's integrity or objectivity.</p> Signup and view all the answers

<p>Professional skepticism allows auditors to remain objective and critical, ensuring they are not unduly influenced by audit clients.</p> Signup and view all the answers

<p>It can threaten independence, especially if the auditor becomes too familiar with the client.</p> Signup and view all the answers

<p>The self-interest threat occurs when auditors have a financial dependence on their clients, which may impair their objectivity.</p> Signup and view all the answers

<p>These policies can influence an auditor's judgment and may lead to conflicts of interest if not managed properly.</p> Signup and view all the answers

<p>They should take steps to disassociate from that information.</p> Signup and view all the answers

<p>It requires accountants not to compromise their judgment due to bias, conflict of interest, or undue influence.</p> Signup and view all the answers

<p>They must attain and maintain knowledge and skill to ensure competent professional service.</p> Signup and view all the answers

<p>A situation where personal interests could compromise professional judgment or actions.</p> Signup and view all the answers

<p>If their judgment is biased or unduly influenced by circumstances or relationships.</p> Signup and view all the answers

<p>By acting diligently in accordance with applicable technical and professional standards.</p> Signup and view all the answers

<p>They should disclose the conflict and avoid activities that impair objectivity.</p> Signup and view all the answers

<p>It ensures that auditors provide unbiased opinions that clients and stakeholders can trust.</p> Signup and view all the answers

<p>An accountant can dispose of or reduce their shareholding in the client and minimize reliance on that client by expanding their client base.</p> Signup and view all the answers

<p>A self-review threat can be managed by having a separate reviewer who was not part of the audit team review the work performed.</p> Signup and view all the answers

<p>An example of an advocacy threat is when an auditor continues to participate in business activities of a firm they audit.</p> Signup and view all the answers

<p>Rotating the engagement partner can mitigate familiarity threats.</p> Signup and view all the answers

<p>A conflict of interest can arise when a firm provides transaction advisory services to a client seeking to acquire an audit client while having obtained confidential information during the audit.</p> Signup and view all the answers

<p>Providing advice to two clients competing for the same company can create a conflict of interest, potentially compromising each client's competitive position.</p> Signup and view all the answers

<p>Providing services to both the buyer and the seller can lead to conflicting interests, as the advisor may have access to sensitive information from both parties.</p> Signup and view all the answers

<p>Representing two clients in a legal dispute, like a divorce, raises a significant conflict of interest, as their interests may be directly opposed.</p> Signup and view all the answers