ACCA Advanced Audit and Assurance (AAA) Practice Exam

What best describes the intimidation threat in auditing?

1. External pressure from regulators

2. Threats to personal integrity or work security

3. Familiarity with clients leading to bias

4. Self-assessment reviews by peers

The correct answer is: Threats to personal integrity or work security

The intimidation threat in auditing is best described by the option that addresses threats to personal integrity or work security. This type of threat occurs when auditors feel pressured or coerced into compromising their independence or objectivity because of fear of negative consequences. These might include job loss, reduced reputation, or retaliatory actions from clients or stakeholders if the auditor does not conform to their wishes or expectations. For instance, if an auditor has a long-standing relationship with a client or is heavily dependent on them for future employment, it may lead to situations where the auditor feels intimidated into overlooking certain issues or issuing a favorable opinion against their professional judgment. This pressure compromises the auditor's ability to act objectively, a core tenet of the auditing profession. The other choices relate to different types of threats in auditing. External pressure from regulators refers to regulatory compliance, which is not about intimidation. Familiarity with clients leading to bias is more about familiarity threats than intimidation. Lastly, self-assessment reviews by peers relate to peer reviews rather than personal threats or pressures. Hence, the choice that accurately describes the intimidation threat is the one focused on threats to personal integrity or work security.