A familiarity threat can be reduced by:
A) rotation of the lead auditor and review partner.
B) rotation of the senior partner.
C) rotation of the audit team.
D) rotation of audit firms.

Question

Quizplus · Accepted Answer

Rotation of the lead auditor and review partner reduces the familiarity threat as it ensures that the auditors involved in the audit are not too familiar with the client and their business. This helps maintain the independence and objectivity of the audit process. Rotating the senior partner or audit team may also help but may not be as effective in reducing the familiarity threat as rotating the lead auditor and review partner. Rotating audit firms may not be necessary if the current audit firm has the necessary independence, objectivity, and competence to conduct the audit.

A Familiarity Threat Can Be Reduced By