Contemporary Auditing 10th Edition by Michael Knapp

Exercise 84

According to court testimony, on July 20, 1995, Drew Bergman recommended to HMI's board of directors that Mei-ya Tsai be hired as the company's chief accounting officer (CAO). One week later, BDO Seidman issued its audit report on HMI's 1995 financial statements. Under presently existing professional standards, would this situation have presented an independence "problem" for BDO Seidman Defend your answer.