ICAEW SE · Chapter 9 · Question 2 of 9
An accountancy firm designs a client's inventory valuation system and then audits the inventory figures produced by that system. Which threat arises?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Self-review threat
Explanation
A self-review threat arises when an accountant evaluates the results of their own or their firm's previous work. The audit team may not appropriately evaluate a system the firm designed. This is a key reason why some non-audit services are restricted for audit clients.
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