The firm of McMaster and Martin, CPA, CA's is concerned that its client's current corporate culture may have an impact on the firm's independence. What kinds of safeguards can the client introduce or create to reduce the threat to independence?

Question

Quizplus · Accepted Answer

Introducing appropriate corporate governance mechanisms and ensuring that the responsibility for the appointment and removal of an auditor rests with independent directors on the audit committee or the board are two effective safeguards that can reduce the threat to independence. Both options can help create a culture of independence and reduce the likelihood of undue influence or pressure on the auditor from the client management.

The Firm of McMaster and Martin, CPA, CA's Is Concerned