[xiaofeifei]

Company A’s investment in Company B accounts almost half of Company A’s annual income. Auditor C owns an immaterial amount of stock in Company B and he will do auditing for company A. Auditor D owns an immaterial amount of stock in Company A and he will do auditing for company B. So for auditor C and auditor D, whose independence will be impaired? Auditor C or auditor D or both? Why

I am so confused by this problem, can anyone help me to figure out? Thanks

[Gary]

Ownership of stock is a direct financial interest. Even though its immaterial, its still a direct financial interest. Independence is impaired for both I think. Someone correct me if I'm wrong but I think both are impaired.

AUD 8/18/16
FAR 11/16
BEC 1/17
REG 2/17

[Author]

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