Another area of concern related to independence is unpaid client fees.

Another area of concern related to independence is unpaid client fees.

If an account receivable from an entity takes on the characteristics of a loan, the auditor’s independence may be impaired. Many public accounting firms adopt a policy of not completing the current audit until all of the prior year’s fees have been paid.

Finally, the CPA firm must be concerned when it also provides consulting services for an audit client. While the performance of consulting services does not, in and of itself, impair independence, the audit team must remain objective when evaluating client activities that were developed by its firm’s consultants. For companies currently subject to the Sarbanes- Oxley Act, the auditor is not permitted to provide certain types of consulting services for audit clients. See Chapter 19 for a list of these services.’

 Place Your Order Here!

Leave a Comment

Your email address will not be published. Required fields are marked *