Keisha Alexander CPA & Associates is a CPA firm that audits large banks. Assume that one of
Question:
Keisha Alexander CPA & Associates is a CPA firm that audits large banks. Assume that one of the engagement partners that works on the audit owns two shares of stock in one of the banks that the CPA firm audits. The ownership of the stock is an insignificant part of the partner's total wealth.
a. Discuss whether the engagement partner has violated the Code of Professional Conduct. If so, what has been violated and why? If not, state why not based on the information in the Code of Professional Conduct?
b. Discuss whether there is a threat to a partner's independence (that is not the engagement partner) by owning two shares in a bank that the firms audits. If so, identify the specific threat and state why you consider it to be a threat. If not, state why not?
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg