A potential independence threat may be posed by:

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Providing a variety of non-audit services to audit clients can create a significant threat to independence in the auditing profession. The principle of independence is crucial for maintaining the integrity and objectivity of the audit process. When auditors perform non-audit services for their audit clients, there’s a risk that their judgment could become impaired due to conflicts of interest. For instance, if an auditor provides consulting services or other business advisory roles alongside auditing, they may inadvertently become too aligned with the client's interests, compromising their ability to remain objective during the audit.

This dual relationship can lead to situations where the auditor might hesitate to challenge the client's financial statements or questionable practices, as it could jeopardize their ongoing consulting relationship. Moreover, the potential for self-review threats arises; for example, if the auditor is responsible for both auditing the client’s financials and advising on their financial practices, there could be biases in the audit due to familiarity with client operations and decisions.

In contrast, regular audits of small businesses, having multiple assurance clients, and strict adherence to auditing standards typically do not pose the same independence threat, as these activities focus more on compliance and objective auditing practices without directly involving conflicts of interest. Maintaining a clear segregation between audit and non-audit services is essential for

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