Guidance notes on independence - Audit Regulations (December 1995)

Situations that may threaten the independence of a firm include:

– undue financial dependence on an audit client or group;

– significant overdue fees from an audit client;

– actual or threatened litigation in relation to an audit client;

influences from outside the audit practice, which might come from:

– associated firms;

– personal or family relationships;

– beneficial or other interests in shares or other investments in an audit client;

– beneficial interests in trusts which have investment in an audit client;

– involvement as a trustee to an audit client;

– loans to or from an audit client;

– receipt of hospitality, goods or services from an audit client;

– at less than full value;

– provision of other services to audit clients;

– a principal or senior employee joining an audit client;

– mutual business interests;

– participation in the business affairs of an audit client;

– voting on audit appointments;

– acting as auditor for a prolonged period of time;

– an officer or employee of an audit client who is related to an employee or principal of the firm.

Far too many practitioners assume that provided they rack up enough CPE/CPD points during the course of the year all will be well.