If a member owns several shares of stock of a company during the first few months of the fiscal year under audit and then sells the shares before accepting the engagement, the firm does not violate the independence rules of the APES 110.

Question

Quizplus · Accepted Answer

According to APES 110 Code of Ethics for Professional Accountants, independence is not violated if the member disposes of the financial interest (e.g., shares) before accepting the audit engagement, as the threat to independence would be eliminated by the disposal of the shares.

If a Member Owns Several Shares of Stock of a Company