A CPA recently was presented with the opportunity to bid to become the auditor for a corporation.This CPA's husband owns stock in that company.Does this CPA satisfy the independence requirement to audit this company?

Question

Quizplus · Accepted Answer

According to the AICPA Code of Professional Conduct, an auditor must be independent in fact and appearance. If the auditor or their immediate family members have any direct financial interest in the company being audited, independence is impaired. It does not matter whether the stock is held jointly or individually, or whether it was purchased with funds earned solely by the husband. Therefore, the CPA in this scenario does not satisfy the independence requirement to audit this company.

A CPA Recently Was Presented with the Opportunity to Bid