Financial interest in an audit client
A financial interest in an audit client can create a self-interest threat to independence. Whether it is direct or indirect, material, held by the firm, a team member or another relevant person, and the applicable Code provisions all affect the response. Certain interests are prohibited rather than merely requiring a safeguard.
Worked example
Before joining an audit team, an accountant reports that they own shares in the audit client and follows the firm’s independence process.
Common mistake
Do not assume disclosure by itself cures an interest that the applicable independence rules prohibit.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Supporting | September 2026–June 2027 |