Question

Count CPAs has offices in Phoenix and Flagstaff. Thread Company is audited by the Phoenix office of Count CPAs. Which of the following individuals would be least likely to be considered a "covered member" by the independence standard?

a) Staff assistant on the audit.
b) An audit partner in the Eloi office.
c) A tax partner in Phoenix who performs no attest services for ABC Company or for any other clients.
d) The partner in charge of Willingham CPAs (she does no work on the ABC Company Audit).

Answer 1

Answer:

The correct answer is b) An audit partner in the Eloi office.

Explanation:

Underwriting practices are based on risk management (mainly business risks), on an independent relationship between the auditor and the auditee, for the public interest.

The information goes to all users, where the external auditor provides independent assurance and all of that as a whole, is what we call the financial information value chain.