Audit committees should consider all factors that might affect the independence of the external auditor and should not approve nonaudit services that they believe might impair independence.

Question

Quizplus · Accepted Answer

This statement is true. Audit committees play a critical role in ensuring the independence of the external auditor and should carefully consider any nonaudit services that they are asked to approve. They should be aware of any factors that may impair the independence of the auditor, such as conflicts of interest or financial relationships between the auditor and the client. If they believe that a particular nonaudit service may impair independence, they should not approve it.

Audit Committees Should Consider All Factors That Might Affect the Independence