threat

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In the field of auditing, a threat to an auditor’s independence is a circumstance that affects the work of the auditor in such a way that it can have an influence on the opinion that’s emitted.

According to “Principles of External Auditing” by Brenda Porter, Jon Simon and David Hatherly (2003), there are five main threats to an auditor´s independence:

1. The self-interest threat – this comes from a financial or other personal-interest conflict of the auditor.

2. The self-review threat – this comes from a difficult situation for an auditor when in a situation in which something from a previous audit must be reviewed, challenged or re-evaluated.

3. The advocacy threat – when an auditor advocates for or supports their client´s position in legal, adversarial or negative situations.

4. The familiarity or trust threat – when an auditor becomes overly influenced by directors, senior managers or other employees becoming too sympathetic to their interests or when the auditor overly trusts the information provided and loses objectivity.

5. The intimidation threat – when an auditor feels intimidated by someone in the company and doesn´t comfortable when performing the audit. Any other financial or participatory involvement can be a threat. Any mutual business interest with an employee or favourable treatment can also be a threat to an auditor´s independence.

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