Kinds of Threats and It's Safeguards

Get Started. It's Free
or sign up with your email address
Rocket clouds
Kinds of Threats and It's Safeguards by Mind Map: Kinds of Threats and It's Safeguards

1. Advocacy Threat

1.1. Acting as an advocate for client in litigation.

1.1.1. 1. Involve an additional chartered accountant who was not a member of the assurance team to review the work or advise as necessary; 2. Quality control review of the assurance engagement; 3. Ensuring that the individual concerned is not entitled to any benefits or payments from the firm unless these are made in accordance with fixed predetermined arrangements. In addition, any amount owed to the individual should not be of such significance to threaten the firm’s independence;

2. Self-Interest Threat

2.1. A member of the assurance team participates in the assurance engagement while knowing, or having reason to believe, that he may join the assurance client in future.

2.1.1. 1.Ask the individual to notify the firm when entering serious employment negotiations with the assurance client;

2.1.2. 2.Remove of the individual from the assurance engagement;

2.1.3. 3.Perform an independent review of any significant judgments made by that individual while on engagement.

3. Self-Review Threat

3.1. A member of the assurance team being, or having recently been, employed by the client in a position to exert direct and significant influence over the subject matter of the engagement.

3.1.1. 1. Involving an additional accountant to review the work done; 2. Independent internal quality reviews; 3. If the threats are significant, the member should not be part of the assurance engagement team.

4. Familiarity Threat

4.1. Long association of senior personnel with the assurance client.

4.1.1. 1. Rotating the senior personnel off the assurance team; 2. Independent internal quality reviews.