The objectivity of external auditors may be threatened or appear to be threatened in the following circumstances:

a) The audit firm has been the external auditor of the client for the past 10 years

b) The audit firm provides non-audit services to the audit client

c) The audit firm is heavily financially dependent on one significant client

d) The audit firm, its partners or staff, have a financial interest in the audit client

e) The audit partner has been invited to sit on the board of directors.


Requirement:
For each of the five circumstances (a) - (e) above, explain the type of threat it creates and analyse the possible consequences of such threats to the conduct and outcome of the audit.

please provide in understandable language and if do not have knowledge of audit and assurance please pass question to other expert. please provide at least 800 words

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Answer rating: 100% (QA)

The objective of an External Auditor in an audit of financial statements is to ensure t... View the full answer