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1. #Generally accepted auditing standards impaired independence registration
2. #Generally accepted auditing standards impaired independence professional
3. #Generally accepted auditing standards impaired independence zip

#Generally accepted auditing standards impaired independence registration

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.

#Generally accepted auditing standards impaired independence zip

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)Īpproximate date of commencement of proposed sale to public:įrom time to time after the effective date hereof. (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices) We hope you’ve enjoyed reading CFI’s guide to threats to auditor independence.(Exact Name of Registrant as Specified in its Charter) Therefore, the auditor may issue a report that appeases ABC Company. The auditor’s independence may be compromised, as ABC Company is their biggest client and they, quite naturally, do not want to lose such a client. ABC Company is the biggest client of the auditor. Intimidation ThreatĪn intimidation threat exists if the auditor is intimidated by management or its directors to the point that they are deterred from acting objectively.ĪBC Company is unhappy with the conclusion of the audit report and threatens to switch auditors next year. The auditor may have become too familiar with the client and, thus, lack objectivity in their work. Familiarity ThreatĪ familiarity threat exists if the auditor is too personally close to or familiar with employees, officers, or directors of the client company.ĪBC Company has been audited by the same auditor for over 10 years and the auditor regularly plays golf with the CEO and CFO of ABC Company. The auditor may issue a favorable report to increase the sale price of ABC Company. The auditor is assisting in selling ABC Company while also serving as the auditor for the company. Advocacy ThreatĪn advocacy threat exists if the auditor is involved in promoting the client, to the point where their objectivity is potentially compromised. The auditor prepares the financial statements for ABC Company while also serving as the auditor for ABC Company.īy having the auditor review his or her own work, the auditor cannot be expected to form an unbiased opinion on the financial statements. Self-Review ThreatĪ self-review threat exists if the auditor is auditing his own work or work that is done by others in the same firm.

The audit team might be tempted to issue a favorable report so that the company is able to secure a loan to settle the fees outstanding for their 2019 audit. However, the audit team has not received its audit fees from ABC Company for its 2019 audit. The audit team is preparing to conduct its 2020 audit for ABC Company. Self-Interest ThreatĪ self-interest threat exists if the auditor holds a direct or indirect financial interest in the company or depends on the client for a major fee that is outstanding. The following are the five things that can potentially compromise the independence of auditors: 1. Furthermore, banks would not be willing to issue a loan for fear that the auditor might’ve provided a biased audit report. Investors would not be willing to extend capital to companies, knowing that the audited information was performed by an auditor who is not independent. The fact is that auditors who lack independence compromise the integrity of financial markets and the reliability of information. If you know that the auditor for ABC Company keeps a close, personal relationship with the CEO of the company, how much would you trust that the audited work is a fair representation of the company’s financial standing? How can you be certain that the auditor and CEO did not collude to issue a favorable audit report? An auditor who lacks independence virtually renders their accompanying auditor report useless to those who rely on them.įor example, consider yourself a potential investor in ABC Company.

#Generally accepted auditing standards impaired independence professional

If an auditor is exposed to a certain threat, he or she should either develop safeguards to reduce the threat to an acceptable level or resign from the audit engagement.Īuditors are expected to provide an unbiased and professional opinion on the work that they audit. Before an audit engagement, it is crucial that each member of the audit team review the five threats to independence.

In the auditing profession, there are five major threats that may compromise an auditor’s independence. Updated NovemWhat are Threats to Auditor Independence?