Which of the following best describes the independence requirements for a close relative of a covered member?
Understand the Problem
The question is asking to identify the correct description of the independence requirements regarding close relatives of covered members in an auditing context.
Answer
A close relative cannot hold a key position with an audit client.
The best description of the independence requirements is that a close relative cannot hold a key position with an audit client.
Answer for screen readers
The best description of the independence requirements is that a close relative cannot hold a key position with an audit client.
More Information
A key position would involve significant influence over the financial statements or accounting records. This rule helps ensure the objectivity of the auditor's work.
Tips
A common mistake is not recognizing the influence a close relative can have if in a key position, which can impair independence.
Sources
- Plain English guide to independence - aicpa & cima - us.aicpa.org
AI-generated content may contain errors. Please verify critical information
