When a public accounting firm audits FUND-A in a mutual fund complex that has sisterfunds FUND-B and FUND-C, independence for the audit of FUND-A is not impaired whena. Managerial-level professionals located in the office where the engagement audit partneris located but who are not on the engagement team own shares in FUND-B, which is notan audit client.b. The wife of the FUND-A audit engagement partner owns shares in FUND-C (an auditclient of another of the firm’s offices), and these shares are held through the wife’semployee benefit plan funded by her employer, the AllSteelFence Company.c. Both (a) and (b).d. Neither (a) nor (b).
When a public accounting firm audits FUND-A in a mutual fund complex that has sisterfunds FUND-B and FUND-C, independence for the audit of FUND-A is not impaired whena. Managerial-level professionals located in the office where the engagement audit partneris located but who are not on the engagement team own shares in FUND-B, which is notan audit client.b. The wife of the FUND-A audit engagement partner owns shares in FUND-C (an auditclient of another of the firm’s offices), and these shares are held through the wife’semployee benefit plan funded by her employer, the AllSteelFence Company.c. Both (a) and (b).d. Neither (a) nor (b).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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When a public accounting firm audits FUND-A in a mutual fund complex that has sister
funds FUND-B and FUND-C, independence for the audit of FUND-A is not impaired when
a. Managerial-level professionals located in the office where the engagement audit partner
is located but who are not on the engagement team own shares in FUND-B, which is not
an audit client.
b. The wife of the FUND-A audit engagement partner owns shares in FUND-C (an audit
client of another of the firm’s offices), and these shares are held through the wife’s
employee benefit plan funded by her employer, the AllSteelFence Company.
c. Both (a) and (b).
d. Neither (a) nor (b).
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