relationships between public accounting firm partners and clients blank multiple select question

Name: relationships between public accounting firm partners and clients blank multiple select question may impair the appearance of independence always impairs auditors independence prevent 83128
Uploaded: 2023-08-17T07:35:16-08:00
Duration: 2 min 25 s
Channel: Madhur L
Description: relationships between public accounting firm partners and clients blank multiple select question may impair the appearance of independence always impairs auditors independence prevent 83128

Step 1: Analyze the options provided in the question regarding the relationships between public

Relationships between public accounting firm partners and...

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Jones & Jones, CPAs, a one-office public accounting firm, has been asked to audit Majestic Mfg. Co. for the 20X2 calendar year. Majestic Mfg. Co. is not a public interest entity as that term is defined in the Conceptual Framework for AICPA Independence Standards. A survey of Jones & Jones, CPAs personnel revealed several instances where relationships of partners and staff with Majestic Mfg. Co. might impair independence. The partners of Jones & Jones, CPAs want the audit engagement, but they will not terminate any staff person or ask any partner to resign to obtain the work. With the restriction on non-termination of partners or staff, which, if any, of the following threats to Jones and Jones, CPAs independence with Majestic Mfg. Co. cannot be eliminated or sufficiently mitigated so that independence is not impaired? A) Olson, a professional staff person, below the rank of manager, has been employed on a full-time basis with Jones & Jones, CPAs since August 20X0. Olson was also a director of Majestic Mfg. Co. for the first six months of 20X2. B) Swanson is a manager with Jones & Jones CPAs. He had been treasurer of Majestic Mfg. Co. from January 20X0 through March 20X2. He resigned his position as treasurer and accepted employment as a manager with Jones & Jones, CPAs on April 1, 20X2. C) Anderson, a Jones & Jones, CPAs partner, is a close personal friend of the president of Majestic Mfg. Co. D) All of the preceding threats to independence can be eliminated or mitigated. E) None of the above threats to independence can be eliminated or mitigated.

Madhur L.

A public accounting firm has offices in Portland and Sacramento. Members of the accounting firm have the following loans to or from officers or directors of a Sacramento audit client. The Sacramento office handles all of the work for this client. A Portland partner has loaned $5,000 to a member of the board of directors, and a Sacramento professional staff person, who does no work for this client, has borrowed $3,000 from the president of this company. Which one, if any, of the above loans would impair the firm's independence with this client? The Portland partner's loan does not impair independence, and the Sacramento professional staff person's loan impairs independence. Both the Portland partner's and the Sacramento professional staff person's loans would impair independence. Neither the Portland partner's nor the Sacramento professional staff person's loans would impair independence. The Portland partner's loan impairs independence, and the Sacramento professional staff person's loan does not impair independence.

Akash M.

A member has been asked to co-sign checks with a client employee while the company president is on vacation. Which statement about the application of the AICPA independence rules to this situation is correct? a) The member will only be co-signing checks, so independence is not threatened. b) The member is a co-signer for a short time, so independence is not threatened. c) The member is performing a management responsibility, so independence is impaired. d) The member has entered into a joint venture with the client, so independence is impaired.

Jennifer S.

Transcript

00:02 Hello students, in this question, we have to state the correct option.

00:06 So option a, state olsen's situation can be mitigated by not allowing him to work on majestic manufacturing company or detachment as he was the director for 6 months of 2012.

00:27 So this would sufficiently mitigate threat of independence.

00:30 So this would mitigate the threat of independence.

00:39 Option b, s situation can also be mitigated by not allowing him to work.

00:49 So he was the treasurer until march 2012.

01:01 So this would sufficiently also mitigate the threat...