Chapter 13: Evaluating & Addressing Threats

Question 1

Steps of Evaluating threats (3+3)

Answer 1

1. Evaluate if threat is at an acceptable level.
2. Consider Qualitative and Quantitative factors.
3. If CA becomes aware of new information (emergence of new threats):
   > Identify new threats
   > The level of threat
   > Whether previous safeguards are still sufficient.

Question 2

Discuss Safeguards (6)

Answer 2

1. Eliminate circumstances (relationship/interest/extra favor)
2. Remove individual from team
3. Involve an independent CA to review work done by team
4. Withdraw from engagement if the above cannot mitigate risk.
5. Inform those charged with governance of the entity
6. Inform appropriate level in own firm