ACCA AA · Chapter 4 · Question 4 of 11
The managing director of an audit client tells the audit engagement partner that the firm will be replaced next year unless it accepts management's preferred accounting treatment for a large provision. Which threat does this represent?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Intimidation threat
Explanation
An intimidation threat arises when an accountant is deterred from acting objectively by actual or perceived pressures, including threats of dismissal. Appropriate responses include discussing the matter with the audit committee and, if necessary, considering whether the firm can continue in office.
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