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objectivity and independence

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › objectivity and independence

  • This topic has 3 replies, 3 voices, and was last updated 1 year ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • May 17, 2019 at 8:52 am #516237
    jihun lee
    • Topics: 117
    • Replies: 51
    • ☆☆

    Hi Kim,

    self interest threat, self review threat, familiarity threat, intimidation threat all affects objectivity then how about independence ?

    can i assme objectivity is basically the same as independence ?

    May 17, 2019 at 9:16 am #516239
    Kim Smith
    Keymaster
    • Topics: 39
    • Replies: 3581
    • ☆☆☆☆☆

    Definition – Independence is:
    (a) Independence of mind – the state of mind that permits the expression of a
    conclusion without being affected by influences that compromise professional
    judgement, thereby allowing an individual to act with INTEGRITY, and exercise
    OBJECTIVITY and professional skepticism.
    (b) Independence in appearance – the avoidance of facts and circumstances that are
    so significant that a reasonable and informed third party would be likely to conclude,
    weighing all the specific facts and circumstances, that a firm’s, or a member of the
    audit or assurance team’s, INTEGRITY, OBJECTIVITY or professional skepticism has been compromised.

    Independence is not a fundamental principle but underpins two fundamental principles – integrity and objectivity.

    Ethical threats are not confined to those that affect objectivity and/or integrity but ANY of the fundamental principles – so also include threats to professional competence and due care, confidentiality and professional behaviour.

    So, for example, a high audit fee creates a self-interest threat to independence (both integrity and objectivity) but pressure to accept a low audit fee (an intimidation threat) might result in an inappropriate reduction in the extent of audit work performed. Although there is an integrity aspect to this there is also a threat to professional competence.

    May 18, 2019 at 10:24 am #516320
    foeldh123
    • Topics: 168
    • Replies: 76
    • ☆☆☆

    so when it should have been independence and if i write objectivity, i won’t get full credit ?

    May 19, 2019 at 10:41 am #516413
    Kim Smith
    Keymaster
    • Topics: 39
    • Replies: 3581
    • ☆☆☆☆☆

    You would get full credit – objectivity is the fundamental principle (and you don’t have to state every fundamental principle that may be affected by a threat in order to earn the mark).

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