ACCA Applied Knowledge · Business and Technology · Fundamental principles of ethical behaviour
A firm prepared the accounting records for a client and the same accountant is now asked to give an opinion on whether those records are free from material error. Which threat does this give rise to?
It is a self-review threat. The accountant would be evaluating the outcome of work that they or their firm performed earlier, and may be reluctant to find faults in it. Familiarity concerns close relationships, and self-interest concerns financial or other personal gain.
- ASelf-review threatCorrect
- BFamiliarity threat
- CSelf-interest threat
Explanation
A self-review threat arises when a professional must evaluate the results of a judgement or service previously provided by themselves or their firm, since they may not appraise it objectively.
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