Six general threats to independence identified by ethical standard
01.Self-Interest Threat:
When auditors or their immediate family members have financial or other interests that could compromise their objectivity.
02.Self-Review Threat:
When auditors must evaluate their own work or the work of others in the same firm, potentially leading to bias.
03.Advocacy Threat:
When auditors promote the interests of their clients, compromising their objectivity and independence.
04.Familiarity Threat:
When long-term relationships or close personal relationships exist between auditors and clients affect objectivity.
05.Intimidation Threat:
When auditors feel pressured or threatened by clients, management, or other parties, impacting their independence.
06.Undue Influence Threat:
When auditors are overly dependent on a client or face pressure to align with client interests, risking compromised independence. Addressing and mitigating these threats is essential for maintaining the independence and objectivity of auditors.