[Anonymous]

Had this on my final exam for my audit class in school, but haven’t seen it in review (never got the exam answers) –

For audit services, independence is impaired when the client hasn’t paid their audit fees in over a year from the last report date and when there is litigation between the audit firm and client.

But my question is for auditor independence with other services like pre-approved tax services or non-audit services that are immaterial (less than 5%):

Is auditor independence impaired if their tax department hasn’t received tax fees in over a year from the same client or the firm’s tax department is being sued by the same client?

[Almost Done]

As far as the AUD test goes, it seems that would be too much of a “grey” area to ask a question like that. On test day though, personally I would take a conservative approach and say that it does impair independence. IMHO

BEC: Passed
REG: Passed
FAR: Passed
AUD: Passed

[nc32]

[nc32]

[nc32]

No requirement for independence with tax services

[Author]

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