The statutory requirements for independence mean an auditor is prohibited from engaging in audit activity if:
A) the auditor is aware of a conflict of interest situation in relation to the client but doesn't take all reasonable steps to resolve it.
B) the auditor is not aware of a conflict of interest situation in relation to the client and doesn't take all reasonable steps to resolve it.
C) there is a breach of the ethical requirements.
D) there is a breach of the auditor registration requirements.

Question

Quizplus · Accepted Answer

The statutory requirements for independence require auditors to be aware of any conflicts of interest and take all reasonable steps to resolve them. If an auditor is aware of a conflict of interest but does not take steps to resolve it, they are prohibited from engaging in audit activity. The other options (B, C, and D) do not fully capture the requirements for auditor independence.

The Statutory Requirements for Independence Mean an Auditor Is Prohibited