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Hi Kim,
I encountered a problem about ethical threat in the ACCA P7 and i want to ask a question about ethical threat
i want to know how self review threat arises when an auditor assist in attending a meeting with the client for the bank loan in september / december 2017 in number 3
When auditors review the financial statement for the audit, they may not carefully review it as they might assume it has been reviewed by auditors in the same firm that have assisted in attending a meeting with the client ?
i would like to know whether such threat is considered self review threat and if wrong, can explain in an easy way ?
Thank you Kim ! !
“Self-review” might apply a threat to an individual (e.g. audit partner) – or a group of individuals (e.g. audit team) – or the firm as a whole. Assigning work to a different person/team will reduce the threat – but not completely eliminate it from the perspective of the firm as a whole. (Only to not undertake the other work at all would achieve that.)
So there would still be some risk that the audit team pays insufficient attention to the loan (and related expense/disclosures) in the financial statements if the audit firm was involved in obtaining it for the client.
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