Threats to auditor independence can come from various sources. Which of these is referred to in the Code of Ethics as self-review threat?
A) the possibility of potential employment with the audit client
B) preparation of original data used to generate a financial statement that is the subject matter of the audit engagement
C) concern on the part of the auditor about the possibility of losing the engagement.
D) pressure to reduce inappropriately the extent of work performed in order to reduce fees.

Question

Quizplus · Accepted Answer

Self-review threat occurs when an auditor reviews any work or judgment made previously by the audit team or by the firm itself. Preparing original data that is used in financial statements audited by the same auditor is a classic example of a self-review threat, as it involves the auditor reviewing their own work or judgment.

Threats to Auditor Independence Can Come from Various Sources