Certified Government Financial Manager (CGFM) 2025 – 400 Free Practice Questions to Pass the Exam

Self-review poses a significant threat to auditor independence because it creates a conflict of interest. When auditors evaluate or review their own work, it compromises their objectivity and impartiality. For instance, if an auditor has prepared financial statements and then is tasked with auditing those same statements, there is a risk that they may overlook errors or misstatements, either intentionally or unintentionally. This situation undermines the principles of independence and objectivity, which are crucial for credible and reliable auditing.

Qualitative assessments, predictive modeling, and fact-checking do not inherently threaten auditor independence. Instead, these practices can enhance the auditing process by providing additional insights, data analysis, and verification of information. They contribute to a more thorough and objective examination without the conflicts of interest that self-review introduces. Thus, while self-review compromises independence, the other options support the integrity of the auditing process.