Mock exam scenario for Questions from 1-5

Hello - sorry for delay - I had to be at a computer to read the scenario in the mock. The last sentence of the scenario is: "The director has also stated that the fee for corporate finance advice services this year should be based on a percentage of report profit." I don't understand your query re Q5. If you are asking which is the self-review threat it is the contingent fee on corporate finance services - this is explained in the answer justification. Yes there is also a self-interest threat (any fee poses a self-interest threat), but that is not the only threat.

Hello, Thanks you. I have seen the last sentence : “The director has also stated that the fee for corporate finance advice services this year should be based on a percentage of report profit.” But what I am enquiring is that there was no introduction of this services in the question suddenly it it was shown in this sentence. Thanks,

What can I say other than it doesn't require introduction? Especially with OT-case questions, information should be provided as succinctly as possible. Scenarios would be excessively long if everything required an introduction before it could be commented on.

Ok understood Sir great help thanks a lot. But with regard with self-review threat was it really accurate. please clarify me, because when I saw the the question I could only consider the self-interest threat. Thanks Sir.

I know what you mean. I think the point is that a fee contingent on the outcome increases the self-review threat because the threat to the auditor's objectivity is increased. The auditor is less likely to challenge the impacts the advice has on the financial statements (it's bound to have some impact sooner or later). The other option that is definitely self-interest threat couldn't be self-review.

Thanks a lot Sir.