Horti Co – Study Hub

Plant Co is a large private company, with a financial year to 31 October, and has been an audit client of Horti & Co for several years. Alan Marshlow, a partner of Horti & Co, has acted as the engagement quality reviewer (EQ reviewer) on the last two audits to the year ended 31 October 20X4. At a recent meeting, he advised that he can no longer be EQ reviewer on the engagement as he is considering accepting appointment as a non-executive director and will sit on the audit committee of Plant Co.

Which of the following correctly identifies the threats to Horti & Co’s independence and proposes an appropriate course of action for the firm if Alan Marshlow accepts appointment as a non-executive director of Plant Co?

Threats Course of action
A Self-interest and familiarity Can continue with appropriate safeguards
B Self-interest and self-review Must resign as auditor
C Self-review and familiarity Must resign as auditor
D Familiarity only Can continue with appropriate safeguards

I chose D, however, the correct answer is B. I didn’t get it why self-interest and self-review threat arise. The former EQ will be the NED for the client, so how can he review his own work when he is not involved in the audit? I mean this should be another way round for self-review threat to arise ie. NED becomes EQ.
Also, how can self-interest threat arise?

Please help me clearing this question,
Thank you.