Self-Review Threats

In a rules-based jurisdiction this may be prohibited but for the AA exam you need to be able to apply the principles of the Code. So if there is a self-interest threat to compliance with fundamental principles (for an auditor we are particularly concerned with integrity and objectivity) there are 3 ways to address it - see s.3 of page 22 - "eliminate, apply safeguards or decline". Bookkeeping is just one example of a non-audit service that might be requested by an audit client (s.3.6 on page 24) - for a PiE the threat to independence would be so great that this would have to be declined. The same for the preparation of financial statements ... (but consider this is really quite hypothetical - would a PiE really not be able to keep its own books/prepare its own accounts? ) When it comes to other services like "tax" and "valuations" a factor to consider is whether it is significant/material to the financial statements - if yes, then don't accept for a PiE (but for a not-PiE client may be able to do if there are safeguards to reduce the threat to an acceptable level).

I understand now. Thank you.

You're most welcome!!