CAT / FIA FAU Syllabus A. Business Environment And Audit Framework - Independence & Confidentiality - Notes ^{6 / 6}

The way in which an audit firm should deal with potential threats to independence is to have in place procedures to:

1. Identify any potential threats

2. Evaluate what level of risk they pose

3. Check that necessary safeguards are in place

4. Correct any problems if necessary

The audit firm should have a checklist to ensure that they meet with the standards required on Independence.

The checklist will be completed when a new client is taken on, as well as at the planning stage of each audit, at completion and when any other services are provided to the client.

Information should only be disclosed by auditors:

• If the client has given their consent

• Under a legal obligation e.g. money laundering, terrorism, drug trafficking

• If required by regulatory body e.g. FSA

• Under a court order

• If in the public interest e.g. environmental pollution

• If one of these categories is not applicable, then the auditor is under no obligation to disclose information and in fact may be in breach of the ACCA code of conduct for doing so.