Reference no: EM132783173

Problem 1. In which of the following situations would an auditor be in violation of the ethical rules in determining his or her fee?

A. A fee based on the time spent on the engagement.
B. A fee based on the nature of the service rendered and the auditor's particular expertise instead of the actual time spent on the engagement
C. A fee based on whether the auditor's report on the client's financial statements results in the approval of bank loan
D. A fee based on the fee charged by the prior auditor.

Problem 2. Which of following threats to independence occurs when an auditor is auditing a company where a former audit partner, from the auditor's firm, is now the Chief Financial officer of the company?

A. familiarity threat
B. self-review threat
C. advocacy threat
D. self-interest threat