Whenever there is a conflict-of-interest situation for the auditor, there is a potential to create a threat to the auditor's independent state of mind.

Question

Quizplus · Accepted Answer

A conflict of interest arises when an individual or entity is involved in multiple interests, and serving one interest could involve working against another. In the case of an auditor, a conflict of interest can create a threat to their independence as it may affect their ability to impartially provide audit services. Therefore, it is true that a conflict-of-interest situation for the auditor creates a potential threat to their independent state of mind.

Whenever There Is a Conflict-Of-Interest Situation for the Auditor, There