EBK AUDITING: A RISK BASED-APPROACH
EBK AUDITING: A RISK BASED-APPROACH
11th Edition
ISBN: 9781337670203
Author: RITTENBERG
Publisher: YUZU
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Chapter 1, Problem 10CYBK
To determine

Introduction:AICPA regulates accounting profession within the country and issues codes of professional conduct that are to be followed by the AICPA members.

To examine:Whether the given statement is true or false.

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Roger Royce, CPA, has encountered a situation that he thinks may pose a threat to his independence with respect to Watson, Incorporated an audit client. The situation is not addressed by an independence rule or regulation. Using the AICPA Conceptual Framework for Independence Standards, describe how Royce can determine whether the threat truly impairs his independence.
Which of the following family relationships is most likely to impair a CPA's independence with respect to a particular audit client on which the CPA works as a “covered member”?  Select one:  The CPA's spouse participates in a savings plan sponsored by the client. A cousin has an immaterial investment in the client of which the CPA is aware.  The CPA's father is president of the audit client.   A close relative has a material investment in that client of which the CPA is not aware.
Each of the following situations involves a possible violation ofthe AICPA Code of Professional Conduct. For each situation, state the applicable section ofthe rules of conduct and whether it is a violation.a. Emrich, CPA, provides tax services, management advisory services, and bookkeepingservices and also conducts audits for the same nonpublic client. Because the firm issmall, the same person often provides all the services.b. Franz Marteens is a CPA, but not a partner, with 3 years of professional experiencewith Roberts and Batchelor, CPAs. He owns 25 shares of stock in an audit client ofthe firm, but he does not take part in the audit of the client, and the amount of stockis not material in relation to his total wealth.c. A nonaudit client requests assistance of M. Wilkenson, CPA, in the installationof a local area network. Wilkenson had no experience in this type of work andno knowledge of the client’s computer system, so he obtained assistance from acomputer consultant. The…

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EBK AUDITING: A RISK BASED-APPROACH

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