Mentioned below are the threats to independence of auditors. Classify them, with reasons, into the appropriate type of threats viz. Advocacy threat,…

(i) Close business relationship with an audit client would be classified as Self-interest threat. Reason: Self-interest threats occur when an auditing firm, its partner or associate could benefit from a financial interest in an audit client. (ii) Auditors perform services that are themselves subject-matter of audit would be classified as Self-review threat. Reason: Self-review threats occur when during a review of any judgement or conclusion reached in a previous audit or non-audit engagement, or when a member of the audit team was previously a director or senior employee of the client. (iii) Auditor deals with shares or securities of the audited company would be classified as Advocacy threat. Reason: Advocacy threats occur when the auditor promotes, or is perceived to promote, a client's opinion to a point where people may believe that objectivity is getting compromised. (iv) Long association between specific auditors and their specific client counterparts would be classified as Familiarity threat. Reason: Familiarity threats are self-evident and occur when auditors form relationships with the client where they end up being too sympathetic to the client's interests. (v) Auditor deterred from acting objectively with an adequate degree of professional skepticism would be classified as Intimidation threat. Reason: Intimidation threats could happen because of threat of replacement over disagreements with the application of accounting principles, or pressure to disproportionately reduce work in response to reduced audit fees or being threatened with litigation.