[cpa007]

The Patton Accounting Firm and one of its partners, Tilly, have depository accounts at the ABC Bank. ABC has just approached Patton about becoming the bank’s auditor. In which of the following situations would there be an independence problem if Patton became ABC’s auditor?
A. ABC is in robust financial health.
B. Tilly’s account is fully insured.
C. Tilly’s account is not fully insured, but the uninsured amount is not material to her financial situation.
D. None of the three choices provided.

ANS?

[livealittle]

I'd say it's D.

I'm not an auditor, and it's been a while since I've studied for AUD, but I think it's an independence problem no matter what. It may not be if Tilly just has normal accounts and only interacts with ABC Bank like any other customer, but I think it's a gray area.

just my opinion, I don't know the answer.

BEC - 8/8/16
REG - 66, 77
AUD - 81
FAR - 9/8/16

[Sticky Nicky]

the answer is C..fully insured would be ok,,,but since its not and its direct then materiality doesnt matter…if its indirect then only material would be a threat,,,but not an indirect immaterial interest…any direct is a threat…funny it also says its immaterial to their institution,,,not to Tilly lol that wouldnt be relavent to an auditors independence

[Author]

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