Which of the following actions is prohibited for audit firms according to professional ethical standards?

Holding shares in clients is a prohibited action for audit firms according to professional ethical standards. This restriction is in place to maintain independence and avoid any potential conflicts of interest that could arise from financial interests in the client. When an audit firm owns shares in a client, it can compromise objectivity, as the auditor may be influenced by personal financial considerations, potentially leading to biased judgments during the audit process.

Ensuring that auditors remain independent from their clients is fundamental to the integrity of the audit profession. Independence is crucial because it fosters trust in the auditor's reports by stakeholders relying on them for accurate and fair assessments of the client's financial statements. The prohibition against holding shares is part of a broader framework of ethical standards designed to safeguard the audit process from external pressures and conflicts of interest.

Other actions mentioned, such as forming partnerships with clients or providing consulting services, may have specific conditions or guidelines under which they can occur, provided that they do not impair the auditor’s independence. Conducting external training sessions is generally acceptable as it contributes to professional development without compromising independence.