Which of the following would most likely be a violation of the independence requirement found in the responsibilities principle under generally accepted auditing standards?
A) An auditor on the engagement has a distant relative who is employed by a vendor that does a significant amount of business with clients.
B) The client's chief executive officer graduated from the same university as the partner in charge of the accounting firm.
C) An auditor on the engagement owns a financial interest in the client's stock.
D) The client provides financial support to a number of charitable causes that also receive support from the accounting firm.

Question

Quizplus · Accepted Answer

The auditor owning a financial interest in the client's stock would be a direct violation of the independence requirement, as it creates a self-interest threat to the auditor's objectivity and impartiality. A distant relative employed by a vendor, a common university affiliation, or charitable contributions would not necessarily create a threat to a reasonable person's perception of the auditor's independence.

Which of the Following Would Most Likely Be a Violation