Circumstances that could impair independence and therefore should be evaluated are called
A) Material weaknesses.
B) Significant deficiencies.
C) Threats to independence.
D) Reportable conditions.

Question

Quizplus · Accepted Answer

Threats to independence refer to any circumstances or relationships that could jeopardize an auditor’s ability to act with integrity, maintain professional skepticism, and make objective and impartial judgments. These threats can arise from financial or personal interests, close relationships with clients, or pressures from third parties. Evaluating and mitigating these threats is crucial to ensure that auditors can perform their duties with independence and objectivity. Material weaknesses, significant deficiencies, and reportable conditions are all related to deficiencies in internal control or financial reporting but are not specific to independence.

Circumstances That Could Impair Independence and Therefore Should Be Evaluated