CAF-8 · Chapter 13 · Question 4 of 20
To safeguard against a 'Self-Interest Threat' caused by high fee dependency on a single client, what measure can an audit firm take?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Implement an external quality control review and ensure the fees from that client do not exceed a certain percentage (e.g., 15%) of the firm's total revenue.
Explanation
Managing fee dependency through firm-wide limits and independent reviews ensures the firm doesn't become afraid of losing the client's fee, which could otherwise weaken their resolve to be honest.
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