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Chapter 3
Threat
Advocacy
 Representing the client
 Promoting the client
 Negotiating on behalf of the
client
Intimidation
 Fee dependency
 Audit partner leaves to join
the client
 Personal relationships
 Litigation with the client
Illustrations and further practice
More examples of threats and safeguards are given in Chapter 3.
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Examples of safeguards
 The audit firm must not act for the audit
client in this way. Any request for such
services must be politely declined
 Monitor fee levels
 Engagement Quality Control Review
(EQCR)
 For listed clients, financial statements
covering a 12 month period must have been
issued by the entity and the partner must
not have been involved in the audit of those
financial statements
 Remove the person from the team
 Discuss the matter with the audit committee
 External review of the audit work, or
 Withdraw from the engagement