An auditor performing nonaudit work for a client may be in danger of violating the independence rules in Government Auditing Standards when he or she provides:
A) Valuation services.
B) Advice on establishing or improving internal controls.
C) Benchmarking information to the client.
D) The client with answers to technical questions.

Question

Quizplus · Accepted Answer

Providing valuation services creates a self-review threat to independence, which is prohibited under Government Auditing Standards. Providing advice on establishing or improving internal controls and benchmarking information is considered a management advisory service and is allowed as long as the auditor complies with the requirements for performing such services. Providing answers to technical questions is also allowed as long as the auditor does not assume management responsibilities or make management decisions.

An Auditor Performing Nonaudit Work for a Client May Be