Self-Review Threats in Auditing

Last time I have shared to you some details about self-interest threat in auditing. Now, lets know more about self-review threats  and how can it affect auditing.

Self-review threat occurs when any product or judgement of a previous assurance engagement or non-assurance engagement needs to be re-evaluated in reaching conclusions on the assurance engagement or when a member of the assurance team was previously a director or officer of the assurance client, or was an employee in a position to exert direct and significant influence over the subject matter of the assurance engagement.

Here are some examples of circumstances that may create this threat, but are not limited to:

  • A member of the assurance team being, or having recently been, a director or officer of the assurance client. 
  • A member of the assurance team being, or having recently been, an employee of the assurance client in a position to exert direct and significant influence over the subject matter of the assurance engagement. 
  • Performing services for an assurance client that directly affect the subject matter of the assurance engagement. 
  • Preparation of original data used to generate financial statements of preparation of other records that are the subject matter of the of the assurance engagement. 
  • Reporting on the operation of financial systems after being involved in their design or implementation. 
  • The discovery of a significant error during re-evaluation of the work of the professional accountant in public practice. 


You might be wondering why we should know about these threats. As a future auditor or maybe an auditor already, we need to keep ourselves free from these threats so as to conduct are audit effectively. If we cannot totally eliminate these threats, at least we should be able to minimize them to an insignificant amount that cannot affect the audit. 

I hope you have learned one more thing today. Keep on visiting my blog!

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