Threats Arising from Employment and Other Relationships (2)

Question 1

What might family or personal relationships with client personnel might create?

Answer 1

A self-interest, familiarity or intimidation threat

Question 2

What is defined as immediate family?

Answer 2

As a spouse (or equivalent) or dependent

Question 3

When is the self-interest, familiarity or intimidation threat created?

Answer 3

When an immediate family member of an audit team member is an employee is a position to exert significant

Question 4

Safeguards to immediate family for audit team member threat

Answer 4

Restructure audit team’s responsiblities so audit team member doesn;t deal with matters within responsibility of immediate family member

Question 5

Influence for immediate family member (position)

Answer 5

Influence over the client’s financial position, financial performance or cash flows

Question 6

Influence over the client’s financial position, financial performance or cash flows level of threat depend on?

Answer 6

Position held by immediate family member. Role of the audit team member

Question 7

Safeguards in influence over the client’s financial position, financial performance or cash flows (preparation)

Answer 7

Is an employee in a position to exert significant over preparation of client’s accounting records

Question 8

What is defined by close family?

Answer 8

A parent, child or sibling who is not an immediate family member

Question 9

What creates a self-interest, familiarity or intimidation threat? (client)

Answer 9

A director/officer of the audit client

Question 10

What creates a self-interest, familiarity or intimidation threat? (employee)

Answer 10

An employee in a position to exert significant influence over preparation of client’s accounting records