Assume that a CPA serves as an audit client’s business consultant and performs each of the following services for the client. Identify the threats to independence. Do you believe any safeguards can be employed to reduce the threat to an acceptable level? Explain.a. Advising on how to structure its business transactions to obtain specific accounting treatment under GAAP.b.Advising and directing the client in the accounting treatment that the client employed for numerous complex accounting, apart from its audit of the client’s financial statements.c. Selecting the audit client’s most senior accounting personnel by directly interviewing applicants for those positions.
Assume that a CPA serves as an audit client’s business consultant and performs each of the following services for the client. Identify the threats to independence. Do you believe any safeguards can be employed to reduce the threat to an acceptable level? Explain.
a. Advising on how to structure its business transactions to obtain specific accounting treatment under GAAP.
b.Advising and directing the client in the accounting treatment that the client employed for numerous complex accounting, apart from its audit of the client’s financial statements.
c. Selecting the audit client’s most senior accounting personnel by directly interviewing applicants for those positions.
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