Threats to independence can be placed into six general categories of threat. For each of the situations below indicate which threat the situation best illustrates:

1. The audit firm is due significant overdue fees.
2. The Financial Director of an audit client is unhappy with a proposed audit opinion and indicates that they will seek to have the audit manager removed.
3. The audit firm is asked to assist in the recruitment of a new Finance Director for an audit client.
4. The audit firm has been asked by a client to underwrite shares in relation to a proposed company flotation

Answer rating: 100% (QA)

Auditing The term Auditing refers to the process of analyzing the overall financial statement of the ... View the full answer