This paper illustrates two formulas for assessing independence risk based on the Bayesian and belief-functions frameworks. These formulas can be used to assess the role of threats to auditor independence as well as the role of threat-mitigating safeguards. Also, these formulas provide a basis for evaluation of an audit firm’s independence risk and a framework to educate stakeholders about the t...

At present, when increasing uncertainty, volatility and turbulence are the main attributes of economic activity, role risk management as a tool for ensuring financial security entities is increasing. Risk provides forecast in simple understandable form, suggests directions methods mitigation. For most business entities, quantitative assessment acceptable understandable, therefore, recent decade...