independence threats

Independence threats occur when there’s a risk that an auditor’s objectivity or impartiality might be compromised during an audit. These threats can stem from relationships, financial interests, or personal connections that could influence the auditor’s judgment or balance, whether consciously or unconsciously. For example, the auditor might develop a close relationship with the client or have a financial stake in their success, leading to biased opinions. Maintaining independence ensures the auditor remains impartial, providing a trustworthy assessment of the organization’s financial statements. Recognizing and addressing these threats is essential to uphold the integrity of the audit process.