ExpertMedium2 marksMultiple Choice
ACCA · Question 06 · Syllabus F: Professional ethics
[Section A] A senior auditor has been assigned to lead the external audit of 'AgriGrow Ltd'. Prior to joining the audit firm three months ago, this same individual was the Financial Controller at AgriGrow Ltd, where they designed the company's current internal control systems. According to the IFAC code of ethics, which structural threat is MOST prominent in this scenario?
[Section A] A senior auditor has been assigned to lead the external audit of 'AgriGrow Ltd'. Prior to joining the audit firm three months ago, this same individual was the Financial Controller at AgriGrow Ltd, where they designed the company's current internal control systems. According to the IFAC code of ethics, which structural threat is MOST prominent in this scenario?
Answer options:
A.
Self-interest threat
B.
Advocacy threat
C.
Familiarity threat
D.
Self-review threat
How to approach this question
Identify the core conflict: the auditor is evaluating systems they personally built.
Full Answer
D.Self-review threat✓ Correct
A self-review threat arises when a professional accountant is required to evaluate the results of a previous judgment made, or service performed, by themselves or another individual within their firm. Since the auditor designed AgriGrow's internal controls, auditing them constitutes a severe self-review threat.
Common mistakes
Selecting Familiarity threat. While the auditor knows the staff, the specific act of auditing systems they built is the textbook definition of a self-review threat.
Practice the full ACCA BT — Business & Technology Practice Exam 2
52 questions · hints · full answers · grading
More questions from this exam
Q01[Section A] A global non-governmental organization (NGO) providing clean water infrastructure in ...MediumQ02[Section A] 'NovaTech', a rapidly growing AI startup, was initially built around its charismatic ...MediumQ03[Section A] A multinational pharmaceutical company is implementing blockchain technology to track...MediumQ04[Section A] A newly assembled cross-border remote team of software developers is currently experi...EasyQ05[Section A] An emergency room administrator at a busy urban hospital uses the Urgent/Important ma...Medium