Which of the following scenarios does NOT impair the independence of a CPA firm from its client?
A)The lead audit partner is the sister-in-law of the client's VP of Accounting.
B)One of the auditors owns stock in a competitor of the client.
C)One of the auditors is the golf partner of the client's CEO.
D)The lead audit partner owns stock in the client.

Question

Quizplus · Accepted Answer

Owning stock in a competitor of the client impairs independence due to the possibility of a financial interest in the outcome of the audit. The other scenarios also have the potential to impair independence due to personal relationships or financial interests in the client.

Which of the Following Scenarios Does NOT Impair the Independence