A junior auditor notices a minor error in the client's calculations. Instead of reporting it, the junior auditor accepts a lavish, highly expensive holiday package from the client's financial controller to ignore the error. Which threats and principles are breached?

Correct answer: B) Self-interest and Intimidation threats; breach of Objectivity and Integrity.

Explanation

Accepting an overly lavish gift creates a massive self-interest threat (and potential intimidation later if blackmailed). This destroys the auditor's Objectivity (unbiased judgment) and Integrity (honesty), as they are now associated with knowingly misleading information.