Jones & Jones, CPAS, a one-office public accounting firm, has been asked to audit Majestic Mfg. Co. for the 20X3 calendar year. Majestic is not a public interest entity as that term is defined in the Conceptual Framework for AICPA Independence Standards. A survey of Jones & Jones personnel revealed several instances where relationships with Majestic might impair independence. The partners of Jones & Jones 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 of the following is a threat to Jones and Jones' independence with Majestic? 1. Olson, a professional staff person, below the rank of manager, has been employed full time with Jones & Jones since August 20X2. Olson was also a director of Majestic for the first nine months of 20X2. II. Swanson is a manager with Jones & Jones. He had been treasurer of Majestic from January 20XO through March 20X2. He resigned his position as treasurer and accepted employment as a manager with Jones & Jones on December 1, 20X2. A. I only B. II only C. I and II D. Neither I nor II
Jones & Jones, CPAS, a one-office public accounting firm, has been asked to audit Majestic Mfg. Co. for the 20X3 calendar year. Majestic is not a public interest entity as that term is defined in the Conceptual Framework for AICPA Independence Standards. A survey of Jones & Jones personnel revealed several instances where relationships with Majestic might impair independence. The partners of Jones & Jones 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 of the following is a threat to Jones and Jones' independence with Majestic? 1. Olson, a professional staff person, below the rank of manager, has been employed full time with Jones & Jones since August 20X2. Olson was also a director of Majestic for the first nine months of 20X2. II. Swanson is a manager with Jones & Jones. He had been treasurer of Majestic from January 20XO through March 20X2. He resigned his position as treasurer and accepted employment as a manager with Jones & Jones on December 1, 20X2. A. I only B. II only C. I and II D. Neither I nor II
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Jones & Jones, CPAs, a one-office public accounting firm, has been asked to audit Majestic Mfg. Co. for the
20X3 calendar year. Majestic is not a public interest ent ity as that term is defined in the Conceptual
Framework for AICPA Independence Standards. A survey of Jones & Jones personnel revealed several
instances where relationships with Majestic might impair independence. The partners of Jones & Jones 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 of the following is a threat to Jones and
Jones' independence with
Majestic?
1. Olson, a professional staff person, below the rank of manager, has been employed full time with Jones &
Jones since August 20X2.
Olson was also a director of Majestic for the first nine months of 20X2.
II. Swanson is a manager with Jones & Jones. He had been treasurer of Majestic from January 20XO through
March 20X2. He resigned
his position as treasurer and accepted employment as a manager with Jones & Jones on December 1, 20X2.
A. I only
B. II only
C. I and II
D. Neither I nor II
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