Ferrule Co is a listed company. Its external audit firm has offered also to provide the company's outsourced internal audit service, including a review of controls over revenue. Which threat to the external auditor's objectivity is most significant?

Correct answer: B) Self-review threat

Explanation

If the audit firm reviews or helps design controls over revenue as internal auditor, the external audit team may later place reliance on that same work, so it would be reviewing its own work. Self-interest from increased fees is also relevant, but the dominant threat is self-review. Ethical codes restrict such services for public interest entities.