QUESTION 1

It is important that the auditor's ability to maintain an unbiased viewpoint in the eyes of others and in the performance of professional services. Required:

a. Why is an auditor's independence so essential and distinguish between independence of mind and independence in appearance.

b. What consulting or non-audit services are prohibited for auditors of public companies? What other restrictions and requirements apply to auditors when providing non-audit services to public companies?

c. Explain how the rules concerning stock ownership apply to partners and professional staff.