Question

Which of the following statements is correct about independence? A. Independence is potentially affected by self-interest, self-review, advocacy, familiarity and intimidation threats. B. Independence is not an element that is considered in the audit process. C. Independence is immaterial to the financial statements. D. Independence is not a requirement of IFAC’s Code of Ethics. 2. An auditor strives to achieve independence in appearance to: A. Appear to an independent third party not to have compromised their integrity. B. Become independent in fact. C. Comply with the international auditing standards of fieldwork. D. Evaluation of all matters of continuing accounting significance

Answer 1

1st question;

A. Independence is potentially affected by self interest, self review, advocacy, familiarity and intimidatioin threats.

The above mentioned points are considered as five threats to the independence of auditor.

Indpendence is an important element to be considered in audit process.

2nd question;

A. Appear to an independent third party not to have compromised their integrity.

Independence in appearance, it means that the third parties perception of auditor's independence.

Indenpendence in fact means that the auditor is not related to the entity being audited and can perform his duties in an unbiased manner.