An audit firm is considered independent even if it performs which of the following services for a publicly traded audit client?
A)Serving as a member of the client's board of directors.
B)Determining which accounting policies will be adopted by the client.
C)Accounting information system design and implementation.
D)Tax return preparation as approved by the board of directors.

Question

Quizplus · Accepted Answer

The independence rules of auditing allow audit firms to provide tax services to their audit clients without compromising their independence as long as the engagement is approved by the client's board of directors. However, serving as a member of the client's board of directors, determining accounting policies, and accounting information system design and implementation are all considered impairments to independence and are not permitted for audit firms.

An Audit Firm Is Considered Independent Even If It Performs