Accounting · Professional Ethics
Which of the following correctly identifies the ethical threat created when a firm's former audit manager becomes the client's finance director, and recommends an appropriate safeguard?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A familiarity threat; the firm must immediately resign from the engagement
- 2A self-review threat; modify the existing audit plan completely
- 3A familiarity threat; appoint a different audit manager to the engagement team✓
- 4A self-review threat; review the work performed by the previous audit manager
Correct answer
A familiarity threat; appoint a different audit manager to the engagement team
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