John Miller is employed at an auditing firm which offers forensic accounting and income tax services.His next engagement is with a tax client,a partnership firm,to assist in the determination of a withdrawing partner's entitlement.The withdrawing partner owns another firm also and John's elder brother is an employee in that firm.Which of the following is the threat faced by John Miller as per AICPA's Guide for Complying with Rules 102-505 (2008)?

Question

Quizplus · Accepted Answer

John Miller faces a self-interest threat as he has a personal interest in the outcome of the engagement due to his brother's employment in the withdrawing partner's firm, which may impair his objectivity in determining the entitlement of the withdrawing partner. The AICPA's Guide for Complying with Rules 102-505 (2008) defines a self-interest threat as "When a member's or a member's firm’s financial or other interests or relationships could exert undue influence on the member's judgment, behavior, or the ability to carry out an engagement in an objective manner."

John Miller Is Employed at an Auditing Firm Which Offers