A self-interest threat refers to the threat that can occur when an accounting firm or its staff

Question

Quizplus · Accepted Answer

A self-interest threat arises when an accounting firm or its staff has a financial interest in an audit client or a related entity. This threat can occur when the firm or staff stand to benefit materially from the outcome of a client engagement. It can compromise the objectivity and independence of the firm or staff, potentially leading to biased judgments or decisions. Examples of self-interest threats include financial interests in an audit client, loans or guarantees provided to an audit client, and contingency fees earned from an audit client.

A Self-Interest Threat Refers to the Threat That Can Occur