Ty is a rising star at Texas State Country & Western Stores. He is the controller of the company. His wife, Rosie, is the lead auditor of the CPA firm that examines Country & Western's financial statements and issues an audit opinion. Given the nature of the relationships, Rosie would violate what ethical standard if she is allowed to conduct the audit:

Question

Quizplus · Accepted Answer

Rosie's close relationship with Ty, the controller of the company, would compromise her independence as an auditor. The independence ethical standard requires an auditor to maintain an unbiased and objective attitude throughout the audit process. This is to ensure that the financial statements are free from any material misstatements or errors. Rosie's personal relationship with Ty would create a conflict of interest, impairing her judgment and compromising her ability to be objective in conducting the audit. As a result, Rosie's independence would be compromised, which violates the ethical standards of the accounting profession.

Ty Is a Rising Star at Texas State Country