ACCA AA · Chapter 4 · Question 5 of 11
An audit firm is asked to represent an audit client in a public dispute with a tax authority and to promote the client's position in the media. Which threat to independence is most significant?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Advocacy threat
Explanation
Promoting a client's position to the point that the firm's objectivity is compromised creates an advocacy threat. Acting as an advocate for a client in a contentious dispute is incompatible with being seen as an independent auditor of that client.
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