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Code of ethics and conduct
Threats and safeguards
3.1 Threats to independence
Threat Definition
Self-interest Where the auditor has a
financial or other interest
that will inappropriately
influence their judgment or
behaviour
Familiarity The auditor becomes too
sympathetic to or trusting of
a client and loses
professional scepticism
Self-review The auditor will be unlikely
to admit to errors in their
own work, or may not
identify the errors in their
own work
Advocacy Promoting the position of
the client or representing
them in some way
Intimidation Actual or perceived
pressures from the client, or
attempts to exercise undue
influence over the
assurance provider
Examples
 Owning shares in a client
 Fee dependency
 Gifts and hospitality
 Employment with the client
 Overdue fees
 Long association
 Personal relationships
 Movement of staff between the
firm and client
 Accounts preparation
 Internal audit
 Tax computations
 Representing the client
 Promoting the client
 Negotiating on behalf of the
client
 Fee dependency
 Personal relationships
 Audit partner leaves to join the
client
 Litigation with the client
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