Question 1 (60 Points)

Regarding the given cases, please choose the threat on the auditors independence and its impact on the fair presentation of the financial statements. (2 Points for Threat, 8 Points for the effect)

1. The clients board of directors offers for CFO position to the auditor for a temporary period of time.

Type of Threat

Effect on the Fair Presentation

2. The auditor and CFO of the client are cousins.

Type of Threat

Effect on the Fair Presentation

3. An audit team member invested KD 10,000 in the client companys shares.

Type of Threat

Effect on the Fair Presentation

4. The CPA firms management consulting client offered to get audit services. The partners are considering the offer.

Type of Threat

Effect on the Fair Presentation

5. During a meeting wit the clients management, CFO said that if the audit report is not expressed in the way they want, next year they will find a new auditor.

Type of Threat Effect on the Fair Presentation 6. Auditor also provides bookkeeping services to the client. Type of Threat Effect on the Fair Presentation