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Why will the following situation create a Self-interest threat
In an initial meeting with the finance director of Stark, you learn that the audit team will not be
entertained on Stark’s yacht this year; instead, he has arranged a balloon flight costing less than
one-tenth of the expense of using the yacht and hopes this will be acceptable.
Ooooo! Well I would want to be on the audit team that got free trips on yachts and balloons – I couldn’t possibly afford that myself! I would very much like such a client! I wouldn’t want to upset them in anyway – e.g. argue about an accounting treatment – in case they didn’t include me in the invitation!
That the balloon trip costs the client only 10% of the use of the yacht doesn’t necessarily make it acceptable – this would have to be assessed – and addressed if not acceptable. This may mean declining the the invitation.
Does that help? What do you think it is if not (personal) self-interest?