Which one of the following situations is most likely to impair independence?
A) Legal action taken by a third party against both the auditee and the audit firm
B) Legal action taken by the auditee against the audit firm in relation to taxation services provided
C) Legal action taken by the auditee against the audit firm in relation to management consulting advice
D) Legal action taken by the auditee against the audit firm claiming deficiencies in the prior year's audit

Question

Quizplus · Accepted Answer

Legal action by the auditee against the audit firm for deficiencies in the prior year's audit directly challenges the auditor's work and could compromise their objectivity and independence in future audits.

Which One of the Following Situations Is Most Likely to Impair