ACCA Strategic Professional · Advanced Audit and Assurance (International) · Specific assignments

Harlow & Partners is the external auditor of Verdant plc. The audit committee asks the firm to also carry out a forensic investigation into suspected bribery by an overseas subsidiary's sales director, with the results likely to inform litigation. Which is the most appropriate response under the IESBA Code?

The firm should identify and evaluate threats to independence, such as self-review and advocacy if it may act in litigation, then apply safeguards or decline if threats cannot be reduced to an acceptable level. Forensic work for an audit client is neither automatically permitted nor automatically prohibited.

1. AAccept without further consideration, because forensic work is always a permitted non-assurance service
2. BDecline, because an auditor may never provide any service other than the audit
3. CAccept only if the investigator is also the engagement partner, to save costs
4. DIdentify and evaluate threats to independence, such as self-review and advocacy if the firm could act as an expert witness, and apply safeguards or decline if threats cannot be reduced to an acceptable levelCorrect