Which of the following is a possible safeguard implemented by the client that might mitigate an...
Which of the following is a possible safeguard implemented by the client that might mitigate an audit independence threat?
| A |
Management has suitable skills to make managerial decisions. |
|
| B |
Management maintains substantial common stock investments in the company. |
|
| C |
Top management selects the auditing firm. |
|
| D |
CPA firm leaderships stresses the importance of complying with professional standards. |
Homework Answers
Answer is option A. Management has suitable skills to make managerial decisions.
Second option is not related to safeguarding mechanism. Because if management itself owns substantial stock it will increase the threat to independce. Also management should not appoint audit firm it should be done by shareholders.
And last option is although a safeguard but not implemented by client.
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