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In Business / College | 2025-07-04

Jonah, an audit partner at Brown & Co., CPAs, is considering entering into a business relationship with Heidi, the CFO of one of his audit clients. Which threats to independence may apply in this situation?

A. Management participation, competence, and self-review threats.
B. Adverse interest, self-dealing, and due care threats.
C. Advocacy, professional conduct, and self-reliance threats.
D. Familiarity, self-interest, and undue influence threats.

Asked by holden2000

Answer (2)

In this situation, Jonah faces multiple threats to his independence, including familiarity, self-interest, and undue influence. These threats could hinder his objective evaluation of the audit client's financial statements. It is essential for auditors to avoid relationships that may compromise their professional integrity. ;

Answered by GinnyAnswer | 2025-07-04

Jonah faces threats to his independence including familiarity, self-interest, and undue influence if he enters a business relationship with Heidi, the CFO of one of his audit clients. These threats may impair his objectivity and professional judgement, which are crucial for the auditing process. Maintaining clear boundaries in professional relationships is essential for preserving auditor independence.
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Answered by Anonymous | 2025-07-06

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