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The following are the potential threats to an auditor's independence:
• Self-interest, where an auditor could benefit from a financial or other form of
interest in or relationship with the company being audited, e.g., an investment in
the company or undue dependence on fees from assurance or non-assurance
services
• Self-review, e.g., performance of services for an audit client that result in the
audit firm auditing its own work
• Advocacy, e.g., acting as an advocate for an audit client’s position in dealings
with third parties
• Familiarity, e.g., long association of an audit engagement partner or other key
engagement personnel with a particular client or a recent former partner or senior
staff member of an audit firm serving as CFO or in some other key management
role at an audit client
• Intimidation, e.g., threat of replacement of an auditor over a disagreement on the
application of accounting principles.
The auditor should be incorruptable. Should have an honest reputation. Should find out window dressing in the balance sheet and write in the reports but should not disclose it any way that would lead to insider trading. That would favourably or unfavourably affect the pric of the co shares. If he does something else it would be surrendering to the militating factors and the auditor would loose his reputation.
