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ldentify the correct statement(s) regarding threats to independence: I. The management
participation threat involves a risk of the auditor essentially reviewing the reports indicating the
results of decisions that the auditor participated in when serving in an attest client management
role. Il. The advocacy threat involves an appearance of preferentially serving the audit firm and
its interests over the interests of the client and the investing public. II. The AICPA requires audit
partner rotation every three years as a safeguard to independence. O Ionly O Il and Ill only O Il
only O I, II, and IllI
Solution
The correct answer is Option A i.e. I only
The correct statement is the management participation threats involves a risk of the auditor
essentially reviewing the reports indicating the results of decisions that the auditor participated in
when serving in an attest client management role.

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ldentify the correct statement(s) regarding threats to independence .pdf

  • 1. ldentify the correct statement(s) regarding threats to independence: I. The management participation threat involves a risk of the auditor essentially reviewing the reports indicating the results of decisions that the auditor participated in when serving in an attest client management role. Il. The advocacy threat involves an appearance of preferentially serving the audit firm and its interests over the interests of the client and the investing public. II. The AICPA requires audit partner rotation every three years as a safeguard to independence. O Ionly O Il and Ill only O Il only O I, II, and IllI Solution The correct answer is Option A i.e. I only The correct statement is the management participation threats involves a risk of the auditor essentially reviewing the reports indicating the results of decisions that the auditor participated in when serving in an attest client management role.