ExpertEasy2 marksMultiple Choice
ACCA · Question 27 · Professional ethics
A senior auditor is assigned to lead the external audit of a commercial drone manufacturer. The auditor's spouse has recently been appointed as the Chief Financial Officer (CFO) of that same drone manufacturer. According to the ethical framework, what specific type of threat does this situation create?
A senior auditor is assigned to lead the external audit of a commercial drone manufacturer. The auditor's spouse has recently been appointed as the Chief Financial Officer (CFO) of that same drone manufacturer. According to the ethical framework, what specific type of threat does this situation create?
Answer options:
A.
Self-interest threat
B.
Self-review threat
C.
Advocacy threat
D.
Familiarity threat
How to approach this question
Identify the relationship: spouses. Close personal relationships create a risk that the auditor will be too trusting or sympathetic. This is a Familiarity threat.
Full Answer
D.Familiarity threat✓ Correct
A familiarity threat arises when a close relationship exists between the professional accountant and the client, leading the accountant to be too sympathetic to the client's interests or too accepting of their work.
Common mistakes
Choosing Self-interest threat. While the spouse's salary benefits the auditor, the ethical framework explicitly categorizes immediate family relationships in leadership roles as a Familiarity threat.
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