Discuss how each of the following situations ......INFO 1...... could affect independence of mind and independence in
Question:
Discuss how each of the following situations ......INFO 1...... could affect independence of mind and independence in appearance, and evaluate the social consequence of prohibiting auditors from doing each one. Which of (1) through (7) are prohibited by the AICPA Code of Professional Conduct? Which are prohibited by the Sarbanes-Oxley Act or the SEC?
Complete the following table by using these statements .....INFO 2.... to evaluate how each situation could affect independence of mind and independence in appearance, and the social consequence of prohibiting auditors from doing each one. Then, indicate whether or not the situation is prohibited by the AICPA Code of Professional Conduct or the Sarbanes-Oxley Act and SEC.
(Complete all answer boxes. Each statement may be used more than once or not at all.)
INFO1-
1) | Owning stock in a client company. | ||||||||||||||||||||||
(2) | Having bookkeeping services for an audit client performed by the same person who does the audit. | ||||||||||||||||||||||
(3) | Having a spouse who is the chief financial officer of a client company. | ||||||||||||||||||||||
(4) | Having the annual audit performed by the same CPA firm for 10 years in a row. | ||||||||||||||||||||||
(5) | Having management select the CPA firm. | ||||||||||||||||||||||
(6) | Recommending adjusting entries to the client's financial statements and preparing financial statements, including footnotes, for the client. | ||||||||||||||||||||||
(7) | Providing valuation services on complex financial instruments for an audit client performed by individuals in a department that is separate from the audit department. INFO2-
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Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello