Watch Your Appearance

BY DAVID J. HOLLISTER

In Test Your Knowledge of Professional Ethics ( JofA, Oct.02, page 110), the answer to question no. 4 indicated that the CPA firm would be independent because the engagement partners mother-in-law (also the clients controller) is not considered a close relative or immediate family under the new independence rules.

The answer to this question may technically be correct, but I was under the impression that a CPA also must avoid any circumstance in which the appearance of not being independent is a possibility. In my opinion this clearly is a situation in which an appearance of a lack of independence should be considered.

If the answer to this question is really correct, then it is no wonder our profession has come under intense criticism by the public. Because I doubted the accuracy of the answer to question 4, I asked my wife for her opinion. She has no technical knowledge of independence rules, but there was no doubt in her immediate reply that the auditor would not be independent.

Is this really what you want to teach the AICPA membership?

David J. Hollister, CPA
Ellenton, Florida

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

COLUMN

Deflecting clients’ requests for defense and indemnity

Client requests for defense and indemnity by the CPA firm are on the rise. Requests for such clauses are unnecessary and unfair, and, in some cases, are unenforceable.