Which of the following examples impairs the appearance of an auditor's independence?
Understand the Problem
The question is asking which example might compromise an auditor's independence, implying an understanding of ethical standards in auditing.
Answer
The auditor's son has a loan from the attest client.
The auditor's son having a loan from the attest client of his father can impair the appearance of the auditor's independence.
Answer for screen readers
The auditor's son having a loan from the attest client of his father can impair the appearance of the auditor's independence.
More Information
Financial relationships involving immediate family and clients can threaten perceived auditor independence.
Tips
Ensure no financial relationships exist between immediate family of the auditor and the audit client.
Sources
- Threats to Auditor Independence - Overview, List of Issues, Examples - corporatefinanceinstitute.com
- ET Section 191 - Ethics Rulings on Independence, Integrity ... - PCAOB - pcaobus.org
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