Question 1

Section A

AuditPro has been assigned to audit a new client, a fast-growing tech firm. The lead audit partner discovers that the tech firm's newly appointed Financial Controller is his former university roommate and best friend of 20 years. Which structural threat to independence does this situation create?

Accepted Answer

Identify the core issue: a close personal friendship. This makes it difficult to be professionally skeptical. This is the definition of a familiarity threat.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming it's a self-interest threat because friends might help each other financially. Unless a financial link is stated, the primary threat is familiarity.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA BT — Business & Technology Practice Exam 4

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