AICPA Independemce threat

Question 1

a) Self-review threat
b) Advocacy threat
c) Adverse interest threat
d) Familiarity threat
e) Undue influence threat
f) Financial self-interest threat
g) Management participation threat

Answer 1

a) Self-review threat—Reviewing evidence that results from the member’s own work (ex:preparing source documents for an audit client).
b) Advocacy threat—Actions promoting the client’s interests or position (ex:promoting a client’s securities).
c) Adverse interest threat—Actions or interests between the member and the client that are in opposition (ex: litigation between the client and the member).
d) Familiarity threat—Members having a close or longstanding relationship with client or knowing individuals or entities who performed nonattest services for the client, (ex:member of the attest engagement team whose spouse is in a key position at the client).
e) Undue influence threat—Attempts by a client’s management (or others) to coerce the member or exercise excessive influence over the member (ex:threat to replace the member over a disagreement regarding an accounting principle).
f) Financial self-interest threat—Potential benefit to a member from a financial interest in, or some financial relationship with, an attest client (ex:having a direct financial interest in the client).
e) Management participation threat—Assuming the role of management or performing management functions for the attest client (ex: serving as an officer of the client).