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order the improve audit quality, the auditor’s responsibility is to express an
opinion on whether management has properly presented the information in the
financial statements that is they show a true and fair view in all material
respects of the company’s financial position, result of the operations and cash
flows. The objectivity of a professional auditor should not allow bias,
conflict of interest or undue influence of others in order to provide an honest
report which can be trusted.

to objectivity of the external auditor can occur in many ways during the
procedure of preparing the financial statement report. Also there will be
certain risk that might affect the external objectivity. The audit risk is
something that auditor might not realize when prepare the financial statements.

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area of risks to the external auditor’s objectivity can arise in a number of
ways, one of them is self-interest threat. This threat is a conflict between
the personal interest of the auditor and the client. The auditor is only
focusing to achieve personal advantage from the client rather than provide a
proper service for the client. For instance, the auditor has only one client or
client that is represents a significant percentage of their business. The
auditor should not do this because of the benefit to their business because it
will lead to a questionable to the objectivity of auditor.

is self-review threat where the auditor prepares a document and then has to
review the document for errors or misstatement that might occur in order to
reach audit conclusion. For example, reporting on systems or controls in a
client when the auditors planned those controls for the client.

area of risk to external auditor objectivity is advocacy threat. It is arise
when auditor seen to encourage the interest of client in some way in the method
that objectivity may be cooperated because he believes he must always support
the client. For example, auditor help the client to promote or supporting a
sale of shares of the company.



threat that may arise of auditor objectivity is familiarity threat. This threat
may occur when a relationship become to close because of the sympathetic to the
client. In addition, this action may be biased to supporting that client also
the auditor’s judgement will lost. To explain this situation is when auditor
accept any goods or service from the client and when the client is their family

is intimidation threat. This threat may occur when an auditor may be
discouraged from action objectively by threats, actual or perceived from
client. Auditors will be affected to this threat because to be an unbiased
manner is wrong and breaking the law of an auditor. For example, auditor being
threatened with removal or replacement In relation to a client engagement.

each of the threats as shown above may arise either in relation to the
auditor’s own person or in a relation to a related person such as a member of
the family, a partner or someone who is close to auditor. 

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