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self-interest threat

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › self-interest threat

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
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  • July 15, 2021 at 6:38 am #627792
    Jiya024
    Member
    • Topics: 168
    • Replies: 56
    • ☆☆☆

    Professor, how does self-interest threat arise in the following scenario?

    “In addition, the creditworthiness of the prospective client should be considered as non-payment of fees can create a self-interest threat.”

    July 15, 2021 at 7:33 am #627808
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8365
    • ☆☆☆☆☆

    Because if the auditor does the work and isn’t paid, unpaid fees are “akin to a loan” – i.e. the auditor has a financial interest.

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