An auditor must not only appear to be independent; he must also be independent in fact. Required:
Question:
An auditor must not only appear to be independent; he must also be independent in fact.
Required:
a. Explain the concept of an "auditor's independence" as it applies to third party reliance upon financial statements.
b. 1. What determines whether or not an auditor is independent in fact?
2. What determines whether or not an auditor appears to be independent?
c. Explain how an auditor may be independent in fact but not appear to be independent.
d. Would a CPA be considered independent for an examination of the financial statements of a 1. Church for which he is serving as treasurer without compensation? Explain.
2. Women's club for which his wife is serving as treasurer-bookkeeper if he is not to receive a fee for the examination? Explain.
Step by Step Answer:
Modern Auditing
ISBN: 9780471542834
5th Edition
Authors: Walter Gerry Kell, William C. Boynton, Richard E. Ziegler