AUD — Quick Sheet
Professional Ethics & Independence
Read time: ~5 minutes
One-minute revision
- Framework: identify threats → evaluate → apply safeguards → decline if unfixable
- 7 threats: self-review, advocacy, adverse interest, familiarity, undue influence, self-interest, management participation
- Independence needed for attest only (audit/review/examination), not compilation (disclose lack) or tax/consulting
- Direct financial interest → always impairs. Indirect → impairs only if material
- Issuers (SOX/PCAOB): 5-year lead partner rotation, 1-year cooling off, most non-audit services banned
COMMON TRAP: Independence in fact isn't enough — appearance matters equally.