According to the standards of the profession, which of the following circumstances will prevent an auditor performing audit engagements from being independent? a. The auditor's brother is the Operations Manager of the firm's client being audited by a team of which the said auditor is not a part of. b. The auditor obtained an automobile loan from a bank which is a client of another auditing firm. c. The auditor's spouse is employed as the Director of finance department of the company the said auditor is currently auditing. d. The auditor's auditing firm is involved in litigation with a previous client relating to billing for consulting services for which the amount involved is insignificant to the firm and to the client company.
According to the standards of the profession, which of the following circumstances will prevent an auditor performing audit engagements from being independent? a. The auditor's brother is the Operations Manager of the firm's client being audited by a team of which the said auditor is not a part of. b. The auditor obtained an automobile loan from a bank which is a client of another auditing firm. c. The auditor's spouse is employed as the Director of finance department of the company the said auditor is currently auditing. d. The auditor's auditing firm is involved in litigation with a previous client relating to billing for consulting services for which the amount involved is insignificant to the firm and to the client company.
Chapter5: Ethical Responsibilities Of Independent Auditors
Section5.2: American International Group, Inc.
Problem 2Q
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According to the standards of the profession, which of the following circumstances will prevent an auditor performing audit engagements from being independent?
a.
The auditor's brother is the Operations Manager of the firm's client being audited by a team of which the said auditor is not a part of.
b.
The auditor obtained an automobile loan from a bank which is a client of another auditing firm.
c.
The auditor's spouse is employed as the Director of finance department of the company the said auditor is currently auditing.
d.
The auditor's auditing firm is involved in litigation with a previous client relating to billing for consulting services for which the amount involved is insignificant to the firm and to the client company.
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