For Many Years,a Partner in a CPA Firm Worked on the Audit

question 7

Multiple Choice

For many years,a partner in a CPA firm worked on the audit of Grossnomics,Inc.This partner now has retired from the CPA firm and serves as a consultant to Grossnomic's Audit Committee.This partner's former CPA firm:

• A) No longer maintains the independence to audit Grossnomics, unless the CPA firm demonstrates to the AICPA that it remains independent in fact and in attitude
• B) No longer maintains the independence to audit Grossnomics under any circumstance
• C) Maintains the independence to audit Grossnomics as long as this former partner no longer has any actual or apparent financial ties to his former CPA firm
• D) Maintains the independence to audit Grossnomics as long as the former partner does not participate in the preparation of Grossnomics' financial statements

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Definitions:

Glass-Steagall Act

A law enacted in 1933 to separate commercial banking from investment banking, intended to reduce conflicts of interest and prevent bank failures.