Independence in Fact and Appearance.

Auditors must not only appear to be independent; they must also be independent in fact.

Required

A. Explain the concept of auditor's independence as it applies to third-party reliance upon financial statements.

B. 

1 What determines whether or not an auditor is independent in fact?

2 What determines whether or not an auditor appears to be independent?

C. Explain how an auditor may be independent in fact but not appear to be independent.

D. Would an accountant in public practice be considered independent for a review of the financial statement of:

1 a church in which the accountant is serving as treasurer without compensation; 

2 a club for which the accountant’s spouse is serving as a treasurer/bookkeeper if the accountant is not to receive a fee for the review?