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Hi
There is threat in the scenario that “Company has asked auditor to attend meeting with potential investors”
Question has asked to identify and explain the threat and also give a safeguardSo for the explanation of this threat would it be correct to say that “This constitutes advocacy threat as it will be difficult for auditor to remain independent as auditor would be seen as promoting investment in the company”
Ant its safeguard that “Auditor must decline the offer and opt either for audit or for advocacy”Not attending would completely eliminate the threat. However, if could probably be reduced to an acceptable level if the auditors confined themselves in talking about factual matters, eg historical trading or explaining the budgeted costs of a new building, but avoiding speculating about future prospects.
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