When the public accounting firm audits FUND-A in a mutual fund complex that has sister funds FUND-B and FUND-C,independence for the audit of FUND-A is not impaired when
A) Managerial-level professionals located in the office where the engagement audit partner is located but who are not on the engagement team own shares in FUND-B, which is not an audit client.
B) The wife of the FUND-A audit engagement partner owns shares in FUND-C (an audit client of another of the firm's offices) and these shares are held through the wife's employee benefit plan funded by her employer, the AllSteelFence Company.
C) Both (a) and (b).
D) Neither (a) nor (b).

Question

Quizplus · Accepted Answer

Independence is not impaired in both scenarios because in (a), the shares are in a non-audit client, and in (b), the shares are held through an employee benefit plan, which is typically considered an indirect financial interest.

When the Public Accounting Firm Audits FUND-A in a Mutual