Week 4 - Safeguards to Objectivity Threats

Question 1

What are the first two steps an audit firm can take?

Answer 1

• education, training and experience
• continued professional development

Question 2

What are the second two steps an audit firm can take?

Answer 2

• corporate governance requirements (how should the audit firm set up its company/policies so everyone does the right thing)
• professional standards

Question 3

What are the final two steps an audit firm can take?

Answer 3

• professional regulatory monitoring and disciplinary
• internal and external reviews

Question 4

What are the first 3 other safeguards?

Answer 4

• rotating senior staff
• disclosing ethical/independence issues with appropriate client staff
• consultation with independent third parties

Question 5

What are the final 2 other safeguards?

Answer 5

• disclosing nature of services provided and extent of fees
• involving another firm to perform or re-perform a part of the engagement