AICPA independence requirements suggest that a CPA should evaluate whether a particular threat to independence would lead a reasonable person, aware of all the relevant facts, to conclude that:
a. There is substantial cause for a legal finding of non-independence.
b. A questioning mind reveals doubt as to independence.
c. An unacceptable risk of non-independence exists.
d. The accountant is definitely not independent.
Answer: C
CPA Exam
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- Which of the following would detect an understatement of a purchase discount?
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- Which of the following procedures most likely could assist an auditor in identifying related-party transactions?
- Which of the following steps should an auditor perform first to determine the existence of related parties?
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- Which of the following statements is correct regarding the predictability of analytical procedures in a financial statement audit?
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- Which of the following is generally included or shown in the auditor's working papers for the audit of a nonpublic company?
- During the first part of the current fiscal year, the client company began dealing with certain customers on a consignment basis. Which of the following audit procedures is least likely to bring this new fact to the auditor's attention?
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- Which of the following items would most likely require an adjustment to the financial statements for the year ended December 31, year 1?
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- Which of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance?
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