Module: Audit and Assurance
Seminar 3 – Professional Ethics
Question (1)
List the FIVE ethical threats to independence and objectivity. For each threat, identify
ONE example of a circumstance that may create the threat.
Threats Example
Self-review Non-audit services. When you are
preparing the account and reviewing the
accounts then there is a self-review
threat there.
Self interest Auditor has some shares in that
company.
Familiarity Auditor has been with the company for
a very long time. Example: KPMG and
Carillion
Advocacy This is where you are promoting your
client publicly in relation to the work that
they do.
Intimidation Auditor is threatened – e.g. if you don’t
give us the audit report we want, then
we will take away some of the services
away from you or we will remove you or
threaten you with litigation.
In the exam, you MUST come up with practical examples!
Question 2
Seminar 3 – Professional Ethics
Question (1)
List the FIVE ethical threats to independence and objectivity. For each threat, identify
ONE example of a circumstance that may create the threat.
Threats Example
Self-review Non-audit services. When you are
preparing the account and reviewing the
accounts then there is a self-review
threat there.
Self interest Auditor has some shares in that
company.
Familiarity Auditor has been with the company for
a very long time. Example: KPMG and
Carillion
Advocacy This is where you are promoting your
client publicly in relation to the work that
they do.
Intimidation Auditor is threatened – e.g. if you don’t
give us the audit report we want, then
we will take away some of the services
away from you or we will remove you or
threaten you with litigation.
In the exam, you MUST come up with practical examples!
Question 2
