ACCA Audit and Assurance (F8) Practice Exam

What is one safeguard against loss of objectivity in auditing?

1. Quality control

2. Audit committee

3. Partner rotation

4. All of the above

The correct answer is: All of the above

The correct answer indicates that multiple safeguards exist to help maintain objectivity in auditing. Each of the listed options plays a role in ensuring that auditors remain independent and unbiased in their assessment. Quality control measures are essential in audit firms as they establish guidelines and procedures that auditors must follow to ensure the integrity and reliability of the audit process. These measures can include peer reviews, internal audits, and compliance checks, all contributing to a culture of accountability and professionalism. The audit committee serves as an independent body usually comprising members of the board of directors who oversee the financial reporting process and auditor oversight. This helps ensure that external auditors can perform their duties without undue influence from management, fostering objectivity. Partner rotation refers to the practice of changing the lead audit partner after a certain period, typically every few years. This prevents long-term relationships that may impair objectivity and independence, as auditors might become too familiar with the client, potentially affecting their judgment. By recognizing that all these elements—quality control, the function of the audit committee, and partner rotation—contribute to safeguarding objectivity in auditing, the answer reflects the holistic approach needed in the profession to maintain ethical standards and enhance the credibility of audited financial statements.