Economics · Professional Ethics and Auditing
An audit assistant highlights potential risks to independence during an audit. Classify the following scenarios into their correct threat categories: 1. The audit engagement partner has been in the position for six consecutive years. 2. The audit engagement partner's daughter works for the audit client. 3. The audit engagement partner's daughter's bonus will be paid in the form of client shares. 4. A 5% bonus is offered to the audit firm if the audit is completed three weeks earlier than last year.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Familiarity threat = 1, 2; Self-interest threat = 3, 4✓
- 2Familiarity threat = 3, 4; Self-interest threat = 1, 2
- 3Self-interest threat = 1, 2; Familiarity threat = None
- 4Familiarity threat = 3, 4; Self-interest threat = None
Correct answer
Familiarity threat = 1, 2; Self-interest threat = 3, 4
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