In short
Independence is freedom from relationships and influences that would compromise, or appear to compromise, an auditor's objectivity. It covers both independence of mind and independence in appearance.
Key takeaways
- Any direct financial interest in an attest client held by a covered member impairs independence, however small.
- Performing management responsibilities for an attest client impairs independence.
- Under the conceptual framework, auditors identify threats, evaluate their significance and apply safeguards.
Where it's tested
AUD: Professional Ethics & Independence — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An audit senior on the engagement team owns 10 shares of the audit client's common stock, worth approximately $300. What is the effect on independence?