commiss recommend statutori auditor independ eu set fundament principl notifi document number text eea relev ec commiss european commun regard treati establish european commun articl indent thereof independ statutori auditor fundament public confid reliabl statutori auditor report add credibl publish financi inform investor creditor employe stakehold eu compani case compani public interest entiti list compani credit institut insur compani ucit invest firm independ profess main mean demonstr public regul statutori auditor audit firm perform task level meet establish ethic principl integr object council direct eec quot approv person respons carri statutori audit account document quot establish minimum qualif requir person allow carri statutori audit articl direct requir eu member state prescrib statutori auditor carri statutori audit behalf audit firm independ articl direct requir member state ensur statutori auditor liabl sanction carri statutori audit independ manner articl direct requir member state ensur minimum member sharehold audit firm interven conduct statutori audit jeopardis independ natur person perform statutori audit behalf audit firm requir appli member administr manag supervisori bodi audit firm person approv statutori auditor member state nation rule statutori auditor independ differ respect scope person independ rule appli audit firm firm kind financi busi relationship statutori auditor audit firm individu firm audit client type audit servic provid audit client safeguard put place situat make difficult provid investor stakehold eu compani uniformli high level assur statutori auditor perform audit work independ eu present internation accept ethic standard statutori auditor independ benchmark nation independ rule eu issu statutori auditor independ address commiss green paper quot role posit liabil statutori auditor eu quot receiv support council econom social committe european parliament result commiss commun quot statutori audit european union forward quot eu committe audit creat committe establish statutori auditor independ prioriti final commiss commun quot eu financi report strategi forward quot underlin import statutori audit carri uniformli high level eu includ common approach profession ethic standard scope initi statutori auditor independ appli eu statutori audit profess aim set benchmark member state requir statutori auditor independ eu agreement reach committe audit member state provid statutori auditor regul interest public common understand independ requir applic fundament principl bring consist interpret address fact circumst threaten statutori auditor independ eu exist principl provid level plai field provis statutori audit servic singl market principl comprehens rigor robust enforc reason consist interpret appli profession bodi supervisor regul statutori auditor client interest parti agreement reach committe audit build initi order develop common independ standard contribut creation singl eu capit market outlin financi servic action plan endors stockholm european council whilst work achiev harmonis continu set nation independ rule complementari eu fundament principl left discret member state rule appli statutori audit compani oper regul industri member state decid requir applic independ standard unlist compani applic list compani principl base approach statutori auditor independ prefer base detail rule creat robust structur statutori auditor justifi action audit profess regul flexibl react promptli effect develop busi audit environ time avoid highli legalist rigid approach permit aris rule base regim principl base approach cater infinit variat individu circumst aris practic legal environ eu principl base approach serv european capit market sme benefit safeguard statutori auditor independ includ effici posit effect ultim contribut effici capit market hand maintain statutori auditor independ creat varieti addit cost born parti includ cost relat develop maintain enforc safeguard independ seek impos safeguard statutori auditor member state regul account anticip cost benefit circumst safeguard bring substanti public benefit modest cost appli audit public interest entiti appli audit small compani public interest safeguard result cost disproportion benefit user compani financi statement establish fundament principl suffici ensur public confid eu statutori auditor appli proper standard integr independ system qualiti assur order check principl properli appli eu statutori auditor regard commiss recommend quot qualiti assur statutori auditor eu quot extern qualiti review statutori auditor includ review complianc independ standard qualiti assur system subject public oversight recommend import step assur audit qualiti step commiss intend forward broader strategi audit address issu intern standard audit isa establish public oversight audit profess role audit committe recommend emphasis respons audit profess uphold auditor independ recommend bring desir harmonis commiss review situat year adopt recommend take account intern develop review specif address question extent recommend impact auditor independ auditor provid audit servic audit client gener agreement eu committe audit contact committe account direct fundament principl recommend recommend framework gener issu statutori auditor independ consid section set overarch independ requir statutori auditor discuss scope person independ rule appli section review rang specif circumst threat independ aris guidanc measur statutori auditor mitig threat relat statutori audit note section intend provid exhaust list circumst threat auditor independ aris statutori auditor alert threat action accord principl guidanc recommend basic principl section essenti safeguard provid section specif circumst support annex relat explan guidanc import term defin appendix recommend rule standard regul statutori auditor independ member state european union implement set fundament principl framework carri statutori audit statutori auditor independ audit client mind appear statutori auditor carri statutori audit financi busi employ relationship statutori auditor client includ audit servic provid audit client reason inform parti conclud compromis statutori auditor independ object integr independ object profession integr overrid principl underli statutori auditor audit opinion financi statement main statutori auditor demonstr public statutori audit perform accord principl act act independ object state mind subject extern verif integr evalu advanc principl rule statutori auditor independ reason inform parti evalu procedur action statutori auditor avoid resolv fact circumst pose threat risk object respons scope respons statutori auditor ensur requir statutori auditor independ compli independ requir appli statutori auditor posit influenc outcom statutori audit posit influenc outcom statutori audit person directli involv statutori audit engag team includ audit partner audit manag audit staff audit team ii profession personnel disciplin involv audit engag lawyer actuari taxat specialist specialist treasuri manag specialist iii provid qualiti control direct oversight audit engag person form part chain command statutori audit audit firm network firm member person audit firm network due circumst posit exert influenc statutori audit independ threat risk statutori auditor independ affect type threat includ interest review advocaci familiar trust intimid level risk statutori auditor independ compromis determin refer signific threat individu combin impact statutori auditor independ determin specif circumst relat statutori audit concern statutori auditor independ risk assess due regard servic provid audit client recent year relationship exist audit client appoint statutori auditor servic provid relationship exist audit client statutori audit system safeguard type safeguard includ prohibit restrict polici procedur disclosur establish order mitig elimin threat statutori auditor independ exist effect safeguard affect level independ risk audit entiti safeguard govern structur impact independ risk assess statutori auditor govern structur audit entiti safeguard mitig threat independ safeguard oper safeguard includ appoint statutori auditor person audit entiti manag oversight commun audit entiti statutori audit servic provid audit firm network involv govern bodi public interest entiti govern bodi statutori auditor annual disclos govern bodi write total amount fee audit firm network member charg audit client affili provis servic report period total amount broken broad categori servic statutori audit servic assur servic tax advisori servic audit servic categori audit servic broken subcategori item differ substanti break subcategori provid inform fee provis financi inform technolog intern audit valuat litig recruit servic categori servic amount charg contract exist propos bid futur servic contract separ analys ii detail relationship audit firm network member firm audit client affili believ thought bear independ object iii relat safeguard place confirm write profession judgement statutori auditor independ mean regulatori profession requir object statutori auditor compromis declar concern independ object compromis seek discuss matter govern bodi audit client audit client public interest entiti govern bodi statutori auditor similar measur qualiti assur qualiti assur system meet minimum requir commiss recommend quot qualiti assur statutori audit eu quot requir mechan contribut safeguard statutori auditor complianc independ requir member state level statutori auditor safeguard ownership control audit firm statutori auditor audit firm major firm vote right vote held person authoris perform statutori audit european union statutori auditor statutori auditor legal statut provis ensur auditor owner gain control audit firm audit firm intern safeguard system statutori auditor set maintain safeguard system integr part firm wide manag intern control structur function system document subject qualiti assur system gener safeguard system audit firm includ written independ polici address current independ standard threat independ safeguard relat thereto activ time commun polici partner manag employe includ regular train educ thereon procedur appli partner manag employe order meet independ standard regular basi respons circumst design top level audit profession partner respons updat polici time commun updat overse adequ function safeguard system document audit client summaris conclus drawn assess threat statutori auditor independ relat evalu independ risk includ reason conclus signific threat note document includ summari step avoid negat independ risk reduc level intern monitor complianc safeguard polici public disclosur fee statutori auditor statutori auditor natur person firm member partner receiv fee audit client audit audit servic provid client report period fee publicli appropri disclos member state regulatori bodi requir disclosur extent audit client audit financi statement publish accord nation law total fee incom broken categori statutori audit servic assur servic tax advisori servic audit servic fee audit servic broken subcategori item differ substanti break subcategori provid inform fee provis financi inform technolog intern audit valuat litig recruit servic respect categori item figur relat categori item preced report period shown percentag break categori provid statutori audit consolid financi statement concern fee receiv statutori auditor network member servic provid audit client consolid entiti disclos specif circumst financi interest actual impend direct indirect financi interest audit client affili includ deriv directli relat thereto threaten statutori auditor independ held statutori auditor person posit influenc outcom statutori audit person scope statutori auditor assess signific threat identifi safeguard mitig independ risk present action includ refus resign audit engag exclus relev person audit team applic regard public interest entiti client statutori auditor seek involv govern bodi process financi interest audit client affili incompat statutori auditor independ statutori auditor audit firm member engag team chain command partner firm network work quot offic quot particip signific proport audit engag hold direct financi interest audit client ii indirect financi interest audit client signific parti iii direct indirect financi interest client affili signific parti person scope hold direct indirect financi interest audit client affili signific parti person concern hold financi interest interest acquir result extern event inherit gift merger firm compani dispos practic month person knowledg dispos financi interest meantim addit safeguard need preserv statutori auditor independ includ secondari review relev person audit work exclus relev person substant decis make statutori audit client statutori auditor independ threaten appar insignific financi interest audit client affili level threat higher unaccept interest acquir held standard commerci term negoti arm length basi respons statutori auditor assess level risk interest present ensur mitig action busi relationship busi relationship statutori auditor audit firm person posit influenc outcom statutori audit person scope hand audit client affili manag hand interest advocaci intimid threat statutori auditor independ busi relationship commit establish relationship prohibit relationship normal busi insignific term threat pose independ statutori auditor applic regard public interest entiti client statutori auditor seek discuss govern bodi audit client case doubt aris busi relationship normal busi insignific relat independ paragraph appli provis statutori audit servic audit firm network member firm provid statutori audit servic owner audit firm affili owner owner posit influenc decis make audit firm affect statutori audit function entiti individu supervisori manageri role entiti posit influenc decis make audit firm affect statutori audit function employ audit client dual employ individu posit influenc outcom statutori audit audit firm person scope audit client affili prohibit loan staff assign audit client affili regard dual employ relationship audit firm employe work audit client loan staff assign assign audit engag team client statutori audit individu audit respons function activ requir perform supervis loan staff assign member engag team leav audit firm join audit client polici procedur audit firm provid requir member engag team immedi notifi audit firm situat involv potenti employ audit client remov engag team member audit engag review audit work perform resign engag team member current recent audit review perform senior audit profession individu join client audit partner engag partner review perform audit partner involv audit engag due size audit firm partner involv audit engag seek review statutori auditor advic profession regulatori bodi engag team member individu chain command join audit client polici procedur audit firm ensur remain signific connect individu includ individu previous involv audit engag capit balanc similar financi interest fulli settl includ retir benefit made accord pre determin arrang influenc remain connect individu audit firm individu particip particip audit firm busi profession activ kei audit partner leav audit firm join audit client kei manag posit perceiv unaccept high level independ risk period year elaps kei audit partner kei manag posit manageri supervisori role audit client individu posit influenc outcom statutori audit person scope member manag bodi board director supervisori bodi audit committe supervisori board audit client member bodi entiti hold directli indirectli vote right client client hold directli indirectli vote right member engag team take manageri supervisori role audit client appli establish employ audit firm director manag audit client join audit firm person member engag team time year period leav audit client person member chain command part substant decis audit engag client affili time year period leav audit client requir appli employe audit client respons held task perform audit client insignific relat statutori audit function famili person relationship individu statutori auditor accept audit engag close famili member hold senior manag posit audit client posit exert direct influenc prepar audit client account record financi statement financi interest audit client insignific busi relationship audit client normal busi insignific term threat pose independ statutori auditor audit firm network individu assign engag team close famili member meet criteria audit partner work quot offic quot partner close famili member meet criteria safeguard ensur member chain command particip decis directli relat audit engag close famili member meet criteria work quot offic quot partner close famili member meet criteria statutori auditor individu engag team chain command person work quot offic quot includ individu close person relationship similar safeguard need assess fact relev individu close person relationship base knowledg statutori auditor individu concern individu respons disclos statutori auditor fact circumst requir safeguard mitig unaccept level independ risk audit servic gener statutori auditor audit firm network member firm servic statutori audit work audit servic audit client affili safeguard system statutori auditor ensur individu emploi audit firm network member firm decis part decis make behalf audit client affili manag provid audit servic independ risk remain due specif threat result natur audit servic risk reduc accept level involv decis make audit client affili statutori auditor safeguard mitig remain independ threat arrang reduc risk review compartmentalis respons knowledg specif audit engag routin notif audit audit engag audit firm network respons safeguard independ includ oversight ongo activ secondari review statutori audit audit partner involv provis servic audit client affili extern review statutori auditor advic profession regulatori bodi applic regard public interest entiti client statutori auditor seek discuss provis audit servic audit client affili client govern bodi exampl analysi specif situat prepar account record financi statement review threat exist statutori auditor audit firm entiti network firm partner manag employe thereof particip prepar audit client account record financi statement signific threat depend spectrum person involv prepar process level public interest signific review threat consid high particip prepar process assist provid sole technic mechan natur advic inform natur statutori audit public interest entiti client concern provis assist statutori audit mandat perceiv unaccept high level independ risk prohibit design implement financi inform technolog system provis servic statutori auditor audit firm entiti network audit client involv design implement financi inform technolog system fit gener inform form part audit client financi statement give rise review threat signific review threat consid high permit statutori auditor audit firm group member firm provid fit servic audit client manag acknowledg write respons system intern control statutori auditor satisfi audit client manag reli fit work primari basi determin adequaci intern control financi report system case fit design project servic provid involv design specif set audit client manag fit servic constitut quot turn kei quot project project consist softwar design hardwar configur implement audit client manag explicitli confirm written acknowledg requir respons design implement evalu process includ decis thereon ii oper system includ data gener system provis limit servic statutori auditor audit firm member network perform connect assess design implement intern account control risk manag control provid person act employe perform manag function case prohibit statutori auditor addit safeguard need mitig remain review threat servic involv design implement financi inform technolog system provid expert team personnel includ engag partner report line audit engag team valuat servic review threat exist statutori auditor audit firm entiti network partner manag employe thereof audit client valuat servic result prepar valuat incorpor client financi statement signific review threat consid high provis valuat servic lead valuat amount materi relat financi statement valuat involv signific degre subject inher item concern case prohibit statutori auditor addit safeguard need mitig remain review threat valuat servic provid expert team personnel includ engag partner report line audit engag team particip audit client intern audit review threat aris circumst statutori auditor audit firm entiti network intern audit servic audit client mitig review threat involv audit client intern audit task statutori auditor satisfi audit client manag govern bodi time respons system intern control establish mainten intern control includ dai dai control process relat authoris execut record account transact ii determin scope risk frequenc intern audit procedur perform iii act find recommend provid intern audit statutori audit statutori auditor satisfi case audit firm entiti network particip audit client intern audit accept outcom intern audit process statutori audit purpos adequ review includ subsequ reassess relev statutori audit work audit partner involv statutori audit intern audit engag act audit client resolut litig advocaci threat exist statutori auditor audit firm entiti network partner manag employe thereof act audit client resolut disput litig review threat aris servic includ estim audit client chanc resolut litig affect amount reflect financi statement signific advocaci review threat consid high statutori auditor audit firm entiti network partner manag employe thereof act audit client resolut litig involv matter expect materi impact client financi statement signific degre subject inher case concern case prohibit statutori auditor addit safeguard need mitig remain advocaci threat includ personnel includ engag partner connect audit engag team report line recruit senior manag statutori auditor audit firm entiti network partner manag employe thereof involv recruit senior kei staff audit client kind threat independ aris includ interest trust intimid threat accept engag assist recruit senior kei staff statutori auditor assess current futur threat independ aris safeguard mitig threat recruit staff kei financi administr post signific threat statutori auditor independ high statutori auditor carefulli circumst provis list potenti candid post unaccept level independ risk statutori audit public interest entiti concern independ risk perceiv high provis short list case decis engag audit client audit audit fee conting fee fee arrang audit engag amount remuner conting result servic provid rais interest advocaci threat consid bear unaccept level independ risk requir audit engag accept conting fee basi order avoid appear conting basi calcul audit fee agre year advanc includ scope variat account unexpect factor work threat independ aris conting fee arrang audit servic statutori auditor audit firm entiti network audit client affili statutori auditor safeguard system ensur arrang conclud assess independ risk creat ensur safeguard reduc risk accept level statutori auditor satisfi safeguard place overcom independ threat audit engag refus statutori auditor resign statutori audit accept audit work relationship total fee total revenu render audit audit servic statutori auditor audit firm network audit client affili allow creat financi depend audit client client group fact appear financi depend consid exist total audit audit fee audit firm network receiv receiv audit client affili make unduli high percentag total revenu year year period statutori auditor fee relationship audit client affili creat financi depend respect person posit influenc outcom statutori audit person scope case statutori auditor audit firm network demonstr financi depend exist relat audit client affili overdu fee fee audit work significantli overdu sum outstand sum fee current assign regard signific loan interest threat independ consid signific statutori auditor accept reappoint practic resign current audit engag situat review partner involv provis servic client review perform situat subject extern review statutori auditor altern advic sought profession regulatori bodi price statutori auditor demonstr fee audit engag adequ cover assign time qualifi staff task complianc audit standard guidelin qualiti control procedur demonstr resourc alloc alloc work similar natur litig interest advocaci threat aris litig take place appear place statutori auditor audit firm person posit influenc outcom statutori audit person scope audit client affili audit audit servic provid client consid order assess threat statutori auditor see threat aris discuss case audit client govern bodi bodi exist profession regulatori bodi threat statutori auditor independ signific likelihood litig materi parti involv litig call question prior statutori audit materi litig progress statutori auditor ceas act circumst evid subject requir nation law senior personnel act long period time trust familiar threat aris member engag team work regularli long period time audit client engag public interest entiti audit client concern mitig threat audit public interest entiti concern statutori auditor requir minimum replac kei audit partner engag team includ engag partner year appoint engag team replac kei audit partner allow return audit client engag year period elaps date replac independ risk aris relat prolong involv engag team member adopt safeguard reduc accept level audit client public interest entiti concern prefer procedur set appli audit firm unabl provid rotat kei audit partner statutori auditor determin safeguard adopt reduc independ risk accept level recommend address member state brussel commiss frederik bolkestein member commiss oj oj oj presid conclus stockholm european council march defin glossari defin glossari term quot statutori auditor quot refer natur legal person type compani firm partnership accord provis compani law direct eec approv author member state carri statutori audit defin glossari defin glossari defin glossari defin glossari defin glossari defin glossari defin glossari defin glossari defin glossari purpos section term quot statutori auditor quot refer natur legal person type compani firm partnership accord provis compani law direct eec approv author member state carri statutori audit paragraph appli audit firm relev member state accord articl ii phrase direct requir major vote right held statutori auditor share regist transfer agreement firm approv nation author compet approv statutori auditor defin glossari paragraph lit appli audit firm relev member state accord articl ii phrase direct requir major vote right held statutori auditor share regist transfer agreement firm approv nation author compet approv statutori auditor provid audit client audit firm posit influenc decis make firm affect statutori audit function individu engag loan staff agreement work direct supervis client origin account transact prepar origin data subject review approv client defin glossari defin glossari annex comment provid addit guidanc interpret fundament set principl set recommend framework basic test effect approach adopt statutori auditor mitig threat risk independ respect audit engag reason inform parti know relev fact circumst audit engag conclud statutori auditor exercis object imparti judgement issu brought attent statutori auditor clear understand meant object state mind independ matter fact appear address issu conduct object independ audit wide rang factor issu includ rang person influenc result audit question exist potenti threat risk reason inform parti regard compromis independ system safeguard elimin mitig threat risk demonstr independ case safeguard demonstr independ declin relationship audit client object integr independ public understand ethic requir appli statutori auditor prerequisit public confid public interest role statutori audit reliabl audit financi statement abil audit profess plai proper part audit process includ understand wai complianc requir monitor import common understand meant quot statutori auditor independ requir quot relat ethic requir quot object quot quot integr quot extent complianc requir object assess ultim goal statutori audit express object audit opinion main mean statutori auditor demonstr express opinion demonstr perform audit process object manner achiev act fair intellectu honesti integr impli fair deal truth conflict interest compromis independ object integr easili test subject extern verif member state audit profess develop rule guidanc uphold pre emin principl clarifi ethic respons statutori auditor requir statutori auditor independ address independ mind state mind regard consider relev task hand independ appear avoid fact circumst signific reason inform parti question statutori auditor abil act object concept statutori auditor independ requir test relev circumst statutori auditor find relationship interest relev task independ absolut standard statutori auditor attain free econom financi relationship entail depend kind state manifestli imposs depend relationship person object test statutori auditor complianc concept independ monitor process relev circumst statutori auditor find relationship interest respect task interest relationship reason inform parti know circumst conclud statutori auditor independ capabl exercis object imparti judgement issu encompass statutori audit engag sens independ proxi integr object verifi reason inform parti respons scope respons respons statutori auditor natur legal person gener compli nation law nation profession rule respect statutori audit includ rule independ case statutori audit appoint statutori auditor respons ensur requir statutori auditor independ compli requir appli organis entiti form audit firm assum legal person statutori auditor person posit influenc outcom statutori audit statutori auditor statutori auditor individu audit firm carri audit work adequ system reason step ensur individu firm compli independ polici procedur system encompass matter intern organis employ contract sanction statutori auditor member network reason measur ensur posit exert influenc statutori audit entiti network owner sharehold partner manag employe compli independ rule appli jurisdict audit opinion issu achiev contractu agreement statutori auditor impos independ rule network member firm partner manag employe regard audit client includ inter firm qualiti review procedur extern qualiti assur access provid network member firm regular inform audit client requir firm provid regular inform busi financi relationship client flow inform identifi relationship network member firm audit client affili affect statutori auditor independ polici obligatori intra firm consult procedur case doubt statutori auditor independ compromis audit client relationship network member firm instrument safeguard independ situat subcontractor agent statutori auditor audit firm involv audit network member firm audit engag statutori auditor audit firm respons determin scope person independ requir appli instrument rule appli gener li audit engag partner individu exercis adequ profession judgement order fulfil task respons assess independ requir compli inform audit audit relationship statutori auditor audit firm network client quot audit firm independ polici quot determin scope statutori auditor recognis threat independ aris relationship audit client direct indirect relationship individu firm practic audit environ statutori auditor assess actual potenti threat aris client relationship natur legal person engag team audit firm network member relationship person contractor agent audit firm audit client includ engag audit matter relationship summari identifi person posit influenc outcom statutori audit rang person independ requir appli statutori auditor sensit varieti factor includ size legal organis structur audit client size structur intern organis audit firm network member statutori auditor volum natur servic provid audit client audit firm network member firm small audit firm partner statutori auditor compani branch member state independ rule appli engag partner audit team partner chain command partner respons audit servic client person firm posit influenc outcom statutori audit statutori auditor medium size multin compani firm network scope rule extend engag partner audit team statutori auditor partner audit team member firm firm network particip audit client oversea entiti includ centralis servic specialist disciplin unit contribut work partner firm firm network particip provis audit servic client partner chain command jurisdict audit opinion deliv oversea countri audit audit work audit client person firm firm network posit influenc outcom statutori audit case independ requir appli equal fall scope differ li number peopl statutori auditor inclus person member engag team chain command statutori auditor give consider person part engag team chain command influenc outcom statutori audit includ owner sharehold audit firm potenti influenc virtu signific vote right owner sharehold audit firm owner sharehold consid posit influenc outcom statutori audit individu supervisori direct manag respons audit function success level locat member audit team emploi audit audit partner potenti influenc virtu work relationship member audit team depend factor size intern organis offic practic unit audit firm network partner entiti consid posit influenc outcom statutori audit statutori auditor person audit firm network due relationship person firm group abil influenc outcom statutori audit exampl includ famili member close person contact member engag team chain command hold signific financi interest audit client hold kei posit client entiti signific interest individu entiti financi signific commerci relationship statutori auditor firm audit client includ major supplier custom contractor statutori auditor identifi individu audit firm network involv audit engag affect extern influenc fact appear take account fact impos independ rule person audit firm network independ threat risk order avoid resolv fact circumst compromis statutori auditor independ essenti firstli identifi threat independ aris specif circumst evalu signific determin level risk statutori auditor independ compromis statutori auditor identifi natur threat judg level risk independ creat base gener natur type threat independ recognis interest threat statutori auditor independ threaten financi interest conflict direct indirect financi interest client depend client audit audit fee desir collect outstand fee fear lose client review threat relat difficulti maintain object conduct review procedur take decis take part decis wholli audit client manag product judgement previou audit audit assign perform statutori auditor firm challeng evalu reach conclus current audit advocaci threat statutori auditor independ threaten statutori auditor advoc client posit adversari proceed situat deal promot share secur client act advoc behalf client litig client litig auditor familiar trust threat risk statutori auditor influenc client person qualiti sympathet client interest long close relationship client personnel result excess trust client insuffici object test represent intimid threat cover possibl auditor deter act object threat fear influenti overbear client signific threat depend varieti quantifi quantifi factor forc statu person involv natur matter caus threat audit environ evalu signific threat statutori auditor kind threat aris set circumst regard set circumst threat consid signific quantit qualit aspect combin increas level independ risk unaccept high level system safeguard threat statutori auditor independ exist statutori auditor document safeguard appropri appli negat reduc signific threat accept level safeguard recognis relat respons audit environ includ govern structur audit client entir system regul public regul oversight audit profess includ disciplinari sanction statutori auditor system intern qualiti control level independ risk level independ risk express point continuum rang quot independ risk quot quot maximum independ risk quot measur precis level independ risk specif activ relationship circumst pose threat statutori auditor independ endpoint independ risk continuum statutori auditor person involv decis independ statutori auditor relat client regulatori bodi statutori auditor consult advic evalu accept level independ risk aris specif activ relationship circumst evalu requir independ decis maker judg exist safeguard elimin adequ mitig threat independ pose activ relationship circumst decis made addit safeguard includ prohibit combin safeguard reduc independ risk likelihood compromis object accept low level audit entiti safeguard govern structur impact independ risk assess analys govern respons audit client safeguard statutori auditor independ differenti govern structur public interest entiti client audit client public interest differenti relev corpor govern task protect actual potenti investor appear statutori auditor independ audit client public interest regard appear independ relat public interest entiti client statutori auditor varieti percept nation region intern public respect corpor govern plai import role safeguard statutori auditor independ statutori auditor formal appoint major vote sharehold annual gener meet sharehold appoint statutori auditor recommend manag case addit approv requir govern bodi audit client manag supervisori board execut director audit committe regulatori bodi regulatori author industri necessarili protect interest minor sharehold potenti investor contribut safeguard statutori auditor independ govern structur entiti audit ensur appoint statutori auditor made interest sharehold engag statutori auditor perform work interest supervisori board audit committe effect accomplish task financi report process reli part work guidanc judgment statutori auditor integr relianc requir statutori auditor perform servic independ order determin signific threat independ evalu level independ risk statutori auditor carefulli audit entiti govern structur infrastructur gener safeguard statutori auditor independ analysi infrastructur includ issu involv govern bodi statutori auditor appoint formal approv manag recommend activ particip negoti potenti statutori auditor durat statutori auditor appoint audit long term contract involv govern bodi commiss audit servic statutori auditor audit firm entiti network member involv activ particip negoti signific engag exist oversight commun statutori audit servic provid audit entiti statutori auditor audit firm network frequenc commun statutori auditor audit client audit client public interest entiti statutori auditor analys govern infrastructur audit client gener safeguard independ client govern bodi statutori auditor analys audit client manag polici provid safeguard independ specif threat address polici entiti polici includ intern procedur object choic commiss audit servic statutori auditor qualiti quantiti staff audit client relev assess risk take manageri decis behalf client client insuffici number staff statutori auditor find take decis mean involv govern bodi state extent respons audit client safeguard independ statutori auditor discuss statutori auditor govern bodi client main mean establish link statutori auditor safeguard audit client protect qualiti assur regim verifi complianc requir deem annual statutori auditor initi process write audit client invit discuss issu disclosur fee disclosur govern bodi fee relationship statutori auditor audit firm network member audit client affili govern bodi evalu impact relationship statutori auditor independ govern bodi requir addit measur safeguard independ statutori auditor regard disclosur made regular basi annual audit engag accept renew addit disclosur detail wider requir public purpos extend amount charg contract outstand servic contract arrang current propos bid futur servic engag compens receiv expect conting fee arrang audit servic broken type servic qualiti assur ensur statutori auditor compli profession standard includ independ requir control enforc system need safeguard procedur consid includ effect control environ start profession approach matter qualiti ethic take account level assur provid regularli monitor evidenc control system enforc independ requir member state system qualiti assur statutori audit commiss recommend quot qualiti assur statutori audit eu quot recommend statutori auditor complianc ethic principl rule includ independ rule subject qualiti review procedur recommend system qualiti assur includ public oversight address public percept independ issu statutori auditor safeguard ownership control audit firm safeguard control audit firm audit firm authoris carri statutori audit articl ii compani law direct requir major audit firm vote right held statutori auditor person approv compet author eu member state natur person firm satisfi minimum condit direct restrict audit firm rais capit capit market privat public offer member state regard fund rais concern statutori auditor independ result impos restrict rule ownership audit firm allow maximum ownership individu statutori auditor restrict minor ownership member regul profess concern hold major vote right suffici ensur statutori auditor control firm auditor held vote right divid number statutori auditor auditor owner effect control audit firm respect care attent paid result threat statutori auditor independ consider safeguard need avoid situat includ limit vote right singl auditor owner statutori auditor hold major vote right audit firm individu hold higher proport individu member regul profess lawyer notari person manag profession consult profession activ rest audit firm network member risk relationship statutori auditor audit firm auditor owner audit firm audit client compromis statutori auditor independ address refer set scope person independ requir appli financi busi link exist audit firm intern safeguard system statutori auditor concern compli independ standard impos law regul profession bodi part regulatori regim adopt voluntarili audit firm part polici order ensur complianc statutori auditor set system relat safeguard statutori auditor audit firm ident legal person requir audit firm audit firm independ polici audit firm develop independ polici cover activ accept accept perform audit client affili detail independ standard develop object enforc implement mainten statutori auditor safeguard encourag continu improv audit firm independ polici flexibl regularli updat updat aris due chang circumst fact independ standard chang due chang public expect design document audit firm independ polici reflect practic environ size organis structur audit firm reflect audit environ client busi portfolio audit firm audit firm involv audit firm assign audit firm polici procedur place ensur relev engag partner notifi relationship exist firm network member firm audit client affili includ requir engag partner consult prior accept assign audit client affili respons engag partner assess relationship thought affect independ statutori auditor practic reason regard group audit situat assess partial deleg audit partner audit partner audit team countri notifi assess impact exist potenti relationship countri engag partner involv independ risk assess signific relationship case audit client govern bodi involv bodi process assess independ risk person audit firm partner manag employe involv audit client audit assign subcontract specialist network member firm audit firm independ polici address requir consult process need prevent person caus unaccept level independ risk statutori auditor order ensur partner manag employe compli independ polici audit firm commun polici appropri train individu regular basi includ inform sanction independ polici violat procedur appli accord independ polici adopt audit firm depend size procedur appli partner manag employe vari small audit firm independ case case basi decid procedur mitig independ risk larg audit firm establish routin procedur order detect hypothet threat statutori auditor independ detect interest threat result financi busi relationship audit firm maintain regularli updat databas restrict entiti list databas provid partner manag employe inform audit client give rise interest threat fulfil criteria databas audit firm posit influenc outcom statutori audit oper safeguard system requir individu regularli provid audit firm person client inform depend size structur audit firm network establish intern procedur ensur consult firm network client signific independ threat unclear consult involv experienc partner involv audit client affair impact independ threat question document independ assess main purpos statutori auditor document independ assess audit client provid evid perform assess properli document includ audit file intern monitor complianc monitor complianc audit firm independ polici integr function audit firm qualiti review structur larg audit firm design task qualiti control specialist independ specialist small medium size audit firm gener assess independ case case basi firm individu complianc review partner member engag team case sole practition small partnership partner engag team involv partner engag team increas level independ risk partner signific audit servic audit client statutori auditor seek advic profession regulatori bodi review statutori auditor public disclosur fee statutori auditor demonstr independ compromis provid audit servic audit client remuner receiv disproportion fee paid statutori audit interest relev audit client add credibl publish financi inform public disclosur requir impos member state nation law relev regulatori bodi enabl reason inform parti view extent imbal statutori audit fee assist assess fee receiv statutori audit servic broken broad categori assur tax advisori audit servic reflect kind servic provid categori audit servic minimum inform provis financi inform technolog intern audit valuat litig recruit servic identifi engag make signific proport categori specif circumst financi interest term quot financi interest quot compris varieti financi interest statutori auditor audit firm person scope section audit client affili client term includ quot direct quot quot indirect quot financi interest direct indirect sharehold audit client affili hold deal secur audit client affili accept pension right benefit audit client affili commit hold financi interest contractu agreement acquir financi interest deriv directli relat financi interest stock option futur dealt exist financi interest direct financi interest person directli involv conduct statutori audit statutori auditor audit firm individu engag team chain command hold direct financi interest audit client share bond note option secur signific interest threat consid high enabl safeguard reduc statutori auditor independ risk accept level case statutori auditor withdraw engag individu audit firm hold direct financi interest exclud individu engag direct financi interest audit client held partner audit firm network work quot offic quot percept interest consid high situat maintain indirect financi interest term quot indirect financi interest quot refer situat person scope invest client entiti invest audit client compani audit client invest person scope hold indirect financi interest interest threat result financi involv signific case indirect sharehold audit client appear person influenc manag decis audit client signific indirect vote right direct sharehold due circumst appear influenc outcom statutori audit addit unaccept level independ risk aris situat statutori auditor person scope serv vote truste trust executor estat secur audit client case safeguard mitig risk supervis control beneficiari government author court hand potenti interest threat statutori auditor independ regard insignific independ risk hold indirect financi interest audit client financi interest directli held invest fund pension fund ucit equival invest vehicl person hold indirect interest directli involv audit fund manag influenc individu invest decis fund manag extern event financi interest acquir result extern event inherit gift merger firm compani hold interest creat signific threat statutori auditor independ dispos practic month person knowledg dispos financi interest interest list compani acquir inherit share sold month knowledg inherit sell share accord applic stock exchang regul govern dispos sale share insid knowledg financi interest dispos addit safeguard need preserv statutori auditor independ statutori auditor awar member engag team acquir share client result inherit individu continu member engag team share sold exclud substant decis make statutori audit client share sold inadvert violat occas statutori auditor awar individu audit firm inadvert hold financi interest audit client affili gener regard violat independ requir inadvert violat compromis statutori auditor independ respect audit client provid statutori auditor establish procedur requir profession personnel report promptli breach independ rule result purchas inherit acquisit financi interest audit client individu promptli notifi individu dispos financi interest earliest opportun inadvert violat identifi take care review relev audit work individu prove imposs compel individu dispos financi interest individu remov engag team individu member engag team inadvert hold financi interest compromis statutori auditor independ individu exclud substant decis make statutori audit client financi involv exist primarili statutori auditor safeguard system provid evid threat independ identifi investig evid refer involv client govern bodi process addit decis threat signific reason decis record busi relationship busi relationship busi relationship relationship involv commerci financi common interest statutori auditor audit firm person posit influenc outcom statutori audit person scope hand audit client affili client manag thereof exampl relationship signific auditor conduct normal busi interest advocaci intimid threat financi interest joint ventur audit client owner manag director individu perform senior manag function client financi interest audit client investor investe relationship audit client give loan audit client guarante audit client risk accept loan audit client borrow guarante audit client provid servic manag director individu perform senior manag function audit client respect person interest individu receiv servic audit client affili concern underwrit offer market sell secur issu audit firm group member firm commit establish relationship dealt establish relationship normal busi normal busi statutori auditor provid audit audit servic audit client affili purchas good servic entiti exampl includ insur bank servic commerci loan agreement purchas offic equip edp softwar compani car transact perform arm length parti gener threaten statutori auditor independ purchas good offer normal wholesal discount term client custom statutori auditor carefulli risk arm length transact reach magnitud threaten independ creat financi depend fact appear accept good servic favour term audit client consid normal busi benefit insignific signific independ risk busi relationship regard signific threat statutori auditor independ depend reason inform parti assum relationship influenc outcom statutori audit object criteria need order evalu signific relationship statutori auditor audit client regard financi statement audit task relationship result statutori auditor audit firm network member influenc manag decis audit client convers relationship enabl audit client affili influenc outcom statutori audit fact appear busi relationship exist primarili statutori auditor safeguard system provid evid threat independ identifi investig evid refer involv client govern bodi process addit decis threat signific reason decis record provis statutori audit servic threat independ consid high permit statutori auditor audit firm member network provid statutori audit servic owner audit firm provis audit servic affili owner consid incompat independ requir owner appear posit influenc decis make audit firm impact statutori audit function influenc aris due percentag vote right owner hold audit firm aris due natur posit held owner owner repres audit firm posit potenti concern includ director senior manag owner member audit firm supervisori board statutori auditor provis audit servic client compromis independ client offic director sharehold hold signific amount vote right audit firm posit influenc firm decis make regard statutori audit function employ audit client dual employ loan staff agreement risk statutori auditor independ consid high permit person scope emploi audit firm network member firm emploi audit client affili statutori auditor polici procedur provid adequ measur identifi instanc dual employ statutori auditor carefulli situat individu emploi audit firm network member firm work loan staff agreement audit client affili loan staff agreement mean engag employe audit firm network work direct supervis client origin account transact prepar origin data subject review approv client assign accept provid individu posit influenc outcom statutori audit individu assign engag team complet loan staff engag audit respons function activ requir perform supervis loan staff assign engag team member join audit client safeguard system audit firm includ polici procedur adapt suit specif circumst depend number factor posit depart individu audit firm partner senior profession circumst lead departur retir termin voluntari withdraw posit depart individu take client manageri posit posit insignific influenc financi statement length time pass individu left audit firm length time elaps depart individu perform servic relat audit engag partner review case individu leav audit firm engag audit partner requir review audit partner risk partner influenc client previou audit addit partner establish close relationship audit team member threaten independ stai audit team final partner knowledg current audit approach test strategi circumv audit design small audit firm perform partner review similar review perform statutori auditor seek advic profession regulatori author manageri supervisori role audit client accept manageri supervisori role audit client potenti concern regard intimid review threat threat aris individu scope member manageri supervisori bodi entiti audit client client entiti posit influenc audit client influenc audit client case level independ risk unaccept high accept posit prohibit nation law requir member audit profess undertak supervisori role compani safeguard ensur profession respons regard engag team recognis member engag team leav audit firm retir post client entiti invit execut post manag supervisori bodi audit client case audit firm ensur requir met establish employ audit firm director manag audit client join audit firm review threat consid high mitig safeguard prohibit person member engag team take part substant decis client audit year period employe audit client join audit firm signific review threat relat respons task employe audit client audit firm employe prepar account valu element financi statement safeguard appli director manag hand employe held manag posit branch audit client review threat mitig activ member engag team relat branch famili person relationship statutori auditor assess risk independ member audit engag team chain command partner quot offic quot includ individu close famili member close person relationship meet criteria consider fact base knowledg circumst relev individu audit firm network polici procedur place requir individu disclos knowledg statutori auditor reli fact circumst account statutori auditor evalu inform determin criteria met mitig action reason period time includ refus engag exclus individu engag team quot offic quot audit firm polici procedur make clear respons individu engag team chain command quot offic quot assess knowledg close famili member close famili contact disclos relev fact circumst respect audit client audit partner charg engag close famili member term quot close famili member quot refer parent sibl spous cohabit children depend depend cultur social environ audit take place term extend famili member necessarili close relationship relev individu includ spous cohabit spous children famili member close famili relationship close relationship famili hard defin includ relationship person famili member entail frequent regular social contact inadvert violat occas statutori auditor awar individu audit firm inadvert report firm famili person relationship audit client gener regard violat independ requir inadvert violat compromis statutori auditor independ respect audit client provid statutori auditor establish procedur requir profession personnel report promptli breach independ rule result famili person relationship accept audit sensit posit close famili member close person fall scope purchas inherit acquisit signific financi interest audit client famili member person promptli remov individu engag team individu member engag team exclud substant decis statutori audit relev client case signific financi interest notifi individu ensur financi interest dispos earliest opportun inadvert violat identifi take care review relev audit work individu audit servic gener independ audit client decis make review threat consid high provis servic statutori audit work involv statutori auditor decis make audit client affili manag entiti statutori auditor member network intend provid audit servic audit client affili statutori auditor ensur individu act behalf audit firm network member decis part decis make behalf audit client affili manag entiti advic assist relat servic provid statutori auditor audit firm give audit client client affili manag entiti opportun decid reason altern prevent statutori auditor audit firm network member make recommend audit client advic justifi object transpar analys expect audit client review recommend reach decis audit client seek advic due legal regulatori provis solut statutori auditor ensur document refer provis quot relev law includ advic extern profession exampl analysi specif situat busi financi market evolv continu inform technolog chang rapidli develop signific consequ manag control state chang draw comprehens list situat provis audit servic audit client creat signific threat statutori auditor independ list safeguard exist mitig threat exampl follow describ specif situat compromis statutori auditor independ discuss safeguard reduc independ risk accept level circumst practic statutori auditor assess implic similar circumst safeguard satisfactorili address independ risk judgement inform parti prepar account record financi statement spectrum involv prepar process spectrum involv statutori auditor includ audit firm network member firm employe thereof prepar account record financi statement end spectrum statutori auditor prepar prime account record bookkeep prepar financi statement perform statutori audit financi statement case statutori auditor help audit client prepar financi statement basi trial balanc assist audit client calcul close entri calcul accrual bad debt depreci end spectrum statutori auditor particip part prepar process case statutori auditor detect shortcom audit client propos disclosur suggest draft amend requir part statutori audit mandat consid provis audit servic manag respons present financi statement end result uncommon set financi statement statutori auditor hand whatsoev present draft natur assist advic audit client manag respons financi statement maintain account record statutori auditor safeguard ensur provid bookkeep relat assist account entri underli assumpt valuat purpos origin client addit statutori auditor involv decis make audit client manag respect entri assumpt statutori auditor assist limit carri technic mechan task provid advisori inform altern standard methodolog audit client appli exampl assist compromis independ includ determin chang journal entri classif account transact account record obtain client approv authoris approv transact prepar sourc document origin data includ decis valuat assumpt make document data exampl assist necessarili compromis independ includ perform mechan bookkeep task record transact audit client manag determin account classif post code transact client gener ledger post client approv entri client trial balanc provid data process servic inform client applic account standard valuat methodolog client decid adopt level public interest review threat aris statutori auditor assist prepar account record financi statement public interest entiti perceiv high mitig safeguard prohibit assist statutori audit mandat assist suggest draft amend due statutori audit detect shortcom audit client propos disclosur case statutori auditor ask particip prepar audit client account record financi statement carefulli public percept relat task depend size structur audit client busi environ client oper local region nation level threat perceiv reach level public question independ statutori auditor accept engag emerg situat emerg case statutori auditor particip prepar process extent accept normal circumst aris due extern unforese event statutori auditor person resourc knowledg audit client system procedur assist client time prepar account financi statement situat consid emerg statutori auditor refus provid servic result sever burden audit client withdraw credit line threaten concern statu emerg situat statutori auditor part final decis seek client approv addit safeguard minimis level risk independ seek discuss situat audit client govern bodi ensur servic provid reason summaris financi statement statutori audit consolid financi statement public interest entiti consolid financi statement public interest entiti client subject statutori audit situat impract subsidiari audit client make arrang accord result local auditor particip prepar financi statement includ audit client consolid financi statement circumst review threat perspect statutori auditor public interest entiti client gener consid signific provid bookkeep relat assist sole technic mechan natur advic inform natur financi statement subsidiari materi audit client consolid financi statement separ total fee audit firm network member receiv servic collect insignific relat consolid audit fee design implement financi inform technolog system financi inform statutori audit work includ test hardwar softwar system audit client gener financi inform disclos financi statement statutori auditor includ audit firm network member firm employe thereof involv design implement financi inform technolog system fit review threat aris respect financi inform includ figur directli disclos financi statement compris valuat physic data financi statement disclosur relat inform gener integr system varieti stand system system bookkeep cost account payrol cash manag system provid physic number wareh product control system spectrum involv spectrum involv statutori auditor design implement fit system end spectrum engag statutori auditor take manag role respons fit system design implement project oper fit system data gener engag result unaccept level independ risk case statutori auditor carefulli assess independ risk aris involv system design implement audit client public interest implic case safeguard reduc independ risk accept level level risk accept statutori auditor role provid advic consortium retain audit client design implement project similarli risk case smaller compani client statutori auditor ask tailor standard shelf account system meet client busi independ risk perceiv unaccept high case design project larg compani public interest entiti client end spectrum statutori auditor engag provid audit client review altern system base review client decid system instal provis servic gener compromis statutori auditor independ provid cost benefit system review properli document discuss audit client independ compromis statutori auditor signific financi interest signific busi relationship system supplier valuat servic valuat servic valuat compris make assumpt regard futur develop applic methodolog techniqu combin order comput rang valu asset liabil busi underli assumpt valuat relat interpret present expect futur includ gener develop consequ action plan audit client close busi environ engag review issu opinion valuat work perform engag articl compani law direct eec articl compani law direct eec articl compani law direct eec collect verifi data valuat perform typic quot due dilig quot work connect sale purchas busi regard valuat servic principl materi subject valuat servic lead valuat amount separ aggreg materi relat financi statement consid creat signific threat independ underli assumpt valuat methodolog appli respons audit client manag part decis make process audit client manag gener determin underli assumpt valuat decid methodolog appli comput import valuat perform requir signific degre subject relat underli assumpt differ applic methodolog regard routin valuat degre subject inher item concern insignific case underli assumpt determin law tax rate depreci rate tax purpos regul provis interest rate wide accept audit client busi sector techniqu methodolog base gener accept standard prescrib law regul circumst result valuat perform inform parti ident materi provis valuat servic compromis statutori auditor independ regard materi financi statement provid audit client manag approv signific matter judgement addit safeguard valuat servic involv insignific degre subject includ requir applic standard techniqu methodolog servic review valuat method parti result valuat materi relat financi statement case statutori auditor remain review threat mitig addit safeguard address threat set valuat servic team separ engag team report line particip audit client intern audit intern audit import element entiti intern control system compani small medium size afford intern audit depart depart lack facil access specialist inform technolog treasuri manag particip statutori auditor intern audit strengthen manag control capac review threat aris clear separ manag control intern audit intern audit activ statutori auditor evalu audit client intern control system determin kind volum subsequ statutori audit procedur avoid threat statutori auditor audit firm network member show involv manag control intern audit capac statutori auditor client financi statement statutori auditor demonstr step result intern audit work review undu relianc result establish natur time extent statutori audit work order ensur audit firm statutori audit work meet requir audit standard statutori auditor independ compromis review matter perform audit partner involv statutori audit intern audit engag impact financi statement compani intern audit depart report govern bodi manag intern audit function perform role complementari statutori audit function separ element corpor govern framework statutori auditor ask perform intern audit work circumst demonstr adequ assess threat independ appli safeguard act audit client resolut litig advocaci review threat circumst statutori auditor audit firm entiti network partner manag employe thereof assist audit client resolut disput litig statutori auditor act audit client resolut disput litig gener perceiv advocaci role incompat respons statutori auditor give object opinion financi statement advocaci threat accompani review threat assist resolut litig requir statutori auditor estim chanc audit client succeed action affect amount reflect financi statement statutori auditor involv resolut litig signific advocaci threat review threat advocaci threat increas statutori auditor audit firm network member firm take activ role behalf audit client resolv disput litig threat signific statutori auditor requir give evid court tribun case client involv take activ role behalf client specif situat gener compromis statutori auditor independ situat includ represent audit client court tax administr case tax litig includ advis client defend account treatment situat member state author secur regul review panel similar european intern bodi investig audit client financi statement circumst statutori auditor analys specif situat involv carefulli assess signific risk independ materi subject provis legal servic audit client connect resolut disput litig creat signific threat independ servic involv matter expect reason inform parti materi impact financi statement act advoc audit client inher subject degre subject vari depend natur legal proceed audit statutori auditor choic evalu outcom legal proceed reli confirm provid extern lawyer engag client degre subject case govern factor compet lawyer complianc ethic rule lawyer profess evid lawyer employe audit firm parti law firm respect legal situat outcom legal proceed estim evid estim amount affect litig lead materi differ servic provid audit firm parti law firm litig employ contract staff tax proceed hand situat involv signific inher subject situat imposs evalu evid object manner due natur busi relationship statutori auditor audit client person involv present manag execut director sharehold case statutori auditor ensur involv audit client action resolut litig minor case matter concern expect materi impact financi statement addit safeguard circumst cover statutori auditor remain threat independ mitig addit safeguard avoid audit engag team involv litig process set engag team report line statutori audit legal servic relat litig recruit senior manag statutori auditor ask assist audit client recruit senior kei staff assess threat independ aris role person recruit natur assist sought care assess highest person recruit signific role client financi manag process regular contact statutori auditor threat interest familiar aris appoint regard natur assist sought accept servic includ review profession qualif number applic give object opinion suitabl post accept servic includ provis short list candid interview provid drawn criteria client statutori auditor judgement case care need ensur opinion candid pre empt audit client decis statutori auditor conclud give assist request directli indirectli particip audit client decis appoint declin provid audit audit fee conting fee audit fee arrang statutori audit work perform public interest inher unsuit fee arrang statutori auditor remuner depend perform figur audit client outcom audit audit fee fix court government bodi constitut conting fee audit fee arrang interest review advocaci threat statutori auditor independ aris fee audit engag depend conting event appli conting arrang statutori auditor audit firm entiti network audit client affili depend conting event mean fee depend progress outcom project attain perform figur audit client affili assess extent conting fee arrang pose threat statutori auditor independ avail suitabl safeguard statutori auditor factor relationship activ conting fee paid conduct current futur audit rang fee amount basi fee calcul perform assess statutori auditor inter alia amount conting fee directli determin refer asset transact percentag acquisit price financi condit growth market capitalis measur subsequ expos audit examin increas interest threat unaccept level hand independ threat gener aris situat direct link basi conting fee start salari employe recruit servic provid signific aspect audit engag govern bodi exist statutori auditor disclos conting fee arrang bodi accord principl set section relationship total fee total revenu excess depend audit audit fee audit client client group rise interest threat statutori auditor independ statutori auditor audit firm avoid exist financi depend carefulli appear depend creat signific threat independ appear financi depend statutori auditor audit firm network perceiv financi depend singl audit client client group total audit audit fee receiv expect receiv client client group exce critic percentag total incom public percept critic percentag depend factor audit environ level depend size firm establish newli creat oper local nation internation gener busi situat market oper circumst carefulli consid statutori auditor assess signific interest threat appear independ analysi perform fee receiv audit audit servic client client group compar firm network total incom relev amount expect receiv current firm network report period analysi level depend safeguard audit partner engag audit audit work client carri review signific audit audit work client advis review consider audit audit work contract subject outstand propos doubt remain size firm partner statutori auditor seek advic profession regulatori bodi review statutori auditor fee relationship statutori auditor type fee relationship singl audit client client group audit firm interest threat audit partner offic branch perceiv depend fee audit client offic servic provid audit client individu respons sell audit audit engag audit client mitig interest threat audit firm reconsid organis structur respons individu applic discuss servic provid charg audit client govern bodi independ compromis signific fee gener provis audit servic audit client affili statutori auditor assess risk independ natur audit servic provid fee gener statutori audit engag audit engag respect relationship total fee receiv audit firm network analysi safeguard audit fee exce audit fee audit partner involv audit audit engag carri review work client advis overdu fee unpaid fee audit work effect loan statutori auditor audit client threaten statutori auditor independ creat mutual financi interest audit client circumst statutori auditor assess level threat action includ disclos extent potenti mutual interest relev parti statutori auditor audit firm circumst review audit partner involv provis servic audit client case sole practition small partnership audit partner involv audit client statutori auditor seek advic profession regulatori bodi review statutori auditor price statutori auditor demonstr fee charg audit engag reason significantli lower charg predecessor quot firm bid engag demonstr quot audit fee depend expect provis audit servic client misl basi futur audit audit fee charg negoti current audit fee statutori auditor polici procedur place demonstr fee meet requir statutori audit public interest entiti concern statutori auditor seek discuss basi calcul audit fee govern bodi litig whilst precis case point improp statutori auditor continu statutori auditor audit client criteria consid audit client alleg defici statutori audit work statutori auditor conclud probabl claim file statutori auditor discuss basi alleg govern bodi audit client bodi exist profession regulatori bodi confirm judgement probabl claim file subject local legal requir statutori auditor resign statutori auditor alleg fraud deceit current manag audit client level independ risk decis resign depend safeguard discuss relev aspect govern bodi client bodi exist statutori auditor profession regulatori bodi countri nation law safeguard independ statutori auditor case alleg fraud requir statutori auditor report detect fraud nation author continu audit work behalf author repres nation public interest case statutori auditor seek legal advic give due consider respons public interest threaten actual litig relat audit servic amount materi statutori auditor audit client claim disput bill servic result consult servic compromis statutori auditor independ senior personnel act long period time mitig familiar trust threat independ statutori auditor engag audit audit client public interest requir replac engag partner kei audit partner engag team reason period time replac safeguard statutori auditor independ risk aris prolong involv member engag team includ senior staff engag audit entiti consolid audit client consolid financi statement composit team appli safeguard rotat measur audit firm qualiti assur scheme seek ensur engag properli continu compromis independ situat due size audit firm intern rotat engag partner kei audit partner constitut safeguard case sole practition practic dai dai relationship limit number audit partner close situat statutori auditor ensur safeguard put place reason period time safeguard includ relev audit engag cover extern qualiti review minimum seek advic profession regulatori bodi suitabl safeguard identifi statutori auditor continu audit engag member engag team replac time serv audit relat familiar trust threat individu assign team year elaps replac articl compani law direct requir member state prescrib statutori auditor independ accord law member state requir statutori audit articl compani law direct requir member state prescrib statutori auditor carri statutori audit profession integr defin glossari defin glossari defin glossari defin glossari defin glossari jurisdict nation law type compani cooper associ financi statement audit statutori auditor assign virtu law govern compani appoint manag bodi govern bodi statutori auditor kind entiti circumst gener safeguard contribut mitig kind interest threat independ appendix glossari gt tabl gt