A CPA Firm Is Comprised of 100 Audit Partners

question 35

Multiple Choice

A CPA firm is comprised of 100 audit partners.Three of these partners own stock in one of the CPA firm's audit clients,with each such partner owning 2% of the outstanding shares in this client.Does this CPA firm retain the independence to audit this client?

• A) Yes, as long as none participate in the audit as the primary or concurring partner
• B) Yes, as long as none render non-audit services to this client
• C) Yes, as long as none is a "covered member' with respect to this client
• D) No

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Definitions:

Strategic Business Unit Level

A focus within an organization that treats a division or product line as a separate entity with its own strategy and objectives.

Nonprofit Organization

An entity that operates for a collective, public, or social benefit, rather than to make profit for owners or shareholders.

Cooperative

A business or organization owned and operated for the mutual benefit of its members or shareholders.

Government Agency

An organization under the government that has specific functions in the administration and implementation of public policy.