The use of another CPA firm by an audit firm to perform part of the engagement on a client's subsidiary will require the audit firm to do which of the following?
A)Merge with the other CPA firm.
B)Perform a peer review on the other CPA firm.
C)Ensure the independence of the other CPA firm of the client.
D)List the other firm in the footnotes to the client's financial statements.

Question

Quizplus · Accepted Answer

When an audit firm uses another CPA firm to perform part of the engagement on a client's subsidiary, the first firm must ensure the independence of the other CPA firm of the client. This is because independence is a key requirement for auditors and the use of another firm could potentially create conflicts of interest or impair independence. The other choices are not necessary in this situation.

The Use of Another CPA Firm by an Audit Firm