Audit and Assurance: What are the Safeguards against Audit Threats?

Safeguards which may eliminate or diminish threats to members fall into three categories:

Safeguards formed by the profession, regulation or legislation include:

academic, training and experience requirements for entry into the profession
continuing professional development requirements
corporate governance regulations
professionals standards (such as ISAs)
professional or regulatory monitoring and disciplinary procedures
external review by a legally empowered third party of the reports or information produced by a member.

Safeguards in the work atmosphere include:

the employer’s own systems of monitoring and ethics and conduct programmes
recruitment procedures, ensuring that only high-caliber, proficient staff are recruited
right disciplinary processes
strong internal controls
leadership that pressures the role of ethical behavior and which expects employees to behave ethically
policies to put into operation and monitor the quality of employee performance, engagements
documented guiding principles regarding the identification of threats to compliance with the fundamental principles, the appraisal of those threats and the implementation of right safeguards
communication of such policies and procedures and schooling on them
the use of different partners and teams for the provision of non-assurance services to assurance clients
policies and procedures to refrain individuals who are not members of an engagement team from improperly influencing the outcome of the engagement
policies and procedures to give employees the power to report ethical issues to senior staff at the employing firm, without fear of retribution from those about whom they are making the report
sharing ethical issues with the client
disclosing to the client the nature of the services given and the fees charged
Consultation with another appropriate professional accountant.

Safeguards created by the individual include:

Audit and Assurance