Is independence impaired for the individual or the public accounting firm on these SEC filing audits according to SEC independence rules?
a. CPA Yolanda is the Best & Co engagement partner on the Casa Construction Company ( CCC) audit supervised from the Santa Fe office of the firm. Yolanda owns 100 shares of CCC.
b. CPA Yolanda sold the 100 CCC shares to CPA Javier, who is another partner in the Santa Fe office but who is not involved in the CCC audit.
c. CPA Javier transferred ownership of the 100 CCC shares to his wife.
d. CPA Javier’s wife gave the shares to their 12- year- old son.
e. CPA Javier’s son sold the shares to Javier’s father.
f. CPA Javier’s father was happy to combine the 100 CCC shares with shares he already owned because now he owns 25 percent of CCC and can control many decisions of the board of directors.
g. CPA Javier’s father declared personal bankruptcy and sold his CCC stock. CCC then hired him to fill the newly created position of director of financial reporting.