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Employment

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Employment

  • This topic has 6 replies, 2 voices, and was last updated 5 years ago by Kim Smith.
Viewing 7 posts - 1 through 7 (of 7 total)
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    Posts
  • July 6, 2020 at 9:23 am #576089
    toushiga
    Participant
    • Topics: 424
    • Replies: 172
    • ☆☆☆☆

    Ms, for the ethical issue of a former audit team member, had joined the audit client, one of the threat arise is self-interest threat.

    The reason for self-interest threat arises is because of the former audit member might entitle the payment from the audit firm? but how it could affect the current audit member ‘s objectivity or independence?

    Thank you.

    July 6, 2020 at 9:56 am #576098
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8310
    • ☆☆☆☆☆

    Perhaps you mean the self-interest threat that arises while the audit team member was on the audit but had not (yet) joined the audit client:
    “A self-interest threat is created when an audit team member participates in the audit engagement while knowing that he/she will, or might, join the client at some time in the future.”

    July 6, 2020 at 11:42 am #576111
    toushiga
    Participant
    • Topics: 424
    • Replies: 172
    • ☆☆☆☆

    So is it mean that the self-interest threat arise is when the audit team member not yet joined the audit client while the intimidation and familiarity threat arises when the audit team member had been joined the audit client?

    Thank you.

    July 7, 2020 at 9:06 am #576206
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8310
    • ☆☆☆☆☆

    Yes

    Please note that when you write “is it mean” (which you do a lot) you should be writing “does it mean” (or “does this mean”).

    July 9, 2020 at 12:05 pm #576415
    toushiga
    Participant
    • Topics: 424
    • Replies: 172
    • ☆☆☆☆

    If the audit team member is only temporary seconded to the audit client company as an employee but not joining, will the self-interest threat still arise before he/she knows the temporary seconded assignment? as it may entitled to the bonus and salary of the audit client?

    Thank you.

    July 9, 2020 at 12:06 pm #576416
    toushiga
    Participant
    • Topics: 424
    • Replies: 172
    • ☆☆☆☆

    It should be “after” they know but not yet assign to the client company

    July 9, 2020 at 1:16 pm #576420
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8310
    • ☆☆☆☆☆

    The potential threats associated with temporary personnel as identified in the Code are serf-review, advocacy and familiarisation. IF a scenario indicated that as a temp the loaned person might receive a bonus from the client, the temp might be presented with a conflict of interest due to self-interest. However, unless this was specified it is pure speculation (and therefore would not be valid as an answer point).

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