Question

Which of the following scenarios more than likely would NOT create an independence problem for Marry?

A.   Marry refinanced his mortgage with A Bank at the time that A Bank was not a client of her firm. The mortgage was subsequently sold to B Bank, which is a client of Marry's firm and she has been asked to be the manager on the attest engagement

B.   Marry serves on the board of directors of a potential review client. She is not assigned to provide services to this client nor is she located in the office that would perform the engagement.

C.   Marry is not a covered member for purposes of her firm’s audit of A Co. but she is a partner in a different office and does own 7% of A’S shares.

D.   Marry is not a covered member for purposes of her firm’s audit of A Co. but she is a partner in a different office and does own 7% of A’S shares.

Answer 1

A) Independence problem - Since May has the loan in the same bank she cannot be on any engagement related to the bank.

B) No Problem - As long as Mary does not involve herself by providing any services she would not have an independence problem.

C) No problem - As long as Mary does not involve herself by providing any services she would not have an independence problem.

D) No Problem - As long as Mary does not involve herself by providing any services she would not have an independence problem.