Business relationships and independence
A close business relationship between an audit firm or relevant individual and an audit client can create self-interest or intimidation threats to independence. The applicable IESBA Code assesses the nature and significance of the interest and may prohibit certain relationships. Separate personal relationships can create different threats.
Worked example
The audit firm and client jointly invest in a material venture; the firm checks whether the relationship is permitted before continuing the audit.
Common mistake
Do not automatically classify a personal relationship as a self-review threat or assume disclosure removes a prohibited business relationship.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |