Which of the following circumstances impairs an auditor's independence?
I. Litigation by a client against an audit firm claiming a deficiency in the previous audit
II. Litigation by a client against an audit firm related to tax services
III. Litigation by an audit firm against a client claiming management fraud or deceit

Question

Quizplus · Accepted Answer

Litigation by a client against an audit firm claiming a deficiency in the previous audit and litigation by an audit firm against a client claiming management fraud or deceit impairs an auditor's independence. Litigation related to tax services does not directly relate to the audit service provided, so it does not impair independence.

Which of the Following Circumstances Impairs an Auditor's Independence