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going basic to a few basic topics i dont understand when there is a self interest to independence and when it is self interest to objectivity.
where a client has not paid last years fees, i thought this would be a self interest threat to objectivity, as the auditor is still seen as independent i thought this would be a threat to the auditor not giving a fair view of the statements. They have a conflict of interest and are being influenced by the unpaid fees.
The answer says it is a self interest threat to independence. could you clarify for me please.
If “the man in the street” KNEW that the auditor had a financial interest in the client (overdue fees is, in essence, no different to a loan) the auditor would NOT be SEEN to be independent – quite the contrary e.g. the auditor would NOT want to report on MURCG (for example) in case that should exacerbate a problem (resulting in calling in of some other loan – meaning the auditor is even LESS likely to be paid).
(I must correct you auditor does NOT “give T&F view” – FS (should) give T&F view and auditor reports OPINION on this.)
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