(1) Owning stock in a client company 2) Having bookkeaping services for an audit cliant parfarmed by the same person who does the audit 3) Having a spouse who is the chiel financial officer of a client company. 4) Having the annual audt parformed by the same CPA firm for 10 years in a row. 5) Having management select the CPA Srm 8) Recommending adjusting entries to the dliant's financial staaments and proparing financial statements Effects on independence of mind a) This situation would have no affect on indepandence of mind b) Absence of checks and belances because the suditor prepared the ststements (c) Audtor concerned that spouse may lose job if erors are tound a Auditor is complacent due to considerable femilierity with the cliert engsgement. Independence of mind is how i Independence of mind refers to whether the auditor has Independence of mind refers to whether the auditor of Frofessional Conduct. Independence of mind refers to the engagement partner. The ownership is an )Auditor may not audit his or har own work as carafulily F) Auditor may permit misstatements to enhance personal weslth. ) Aud tor unwilling to oriticize somathing prepared by his or her own im (h) Auditor unwilling to dissgree with management for feer of terminaion df temin including footnates, for the cient he 7) Providing valuation services on complax financial instruments for an audit client performed by individual ownership in the rules of conduct in a department that is separate from the audit department by a partner or shareholder. Such a small t 12 Effects on indopendence in appearance: )This stuation would have no effect on independence in appearance G) Uzars may parcaive that the auditor is unwilling to dangree with managemant. (k) Users may perceive that the auditor may not independently audit the work performed 1) Usars may percaive that the auditor wauld parmit miastatements if it would banafit tham Print Done s of conduct of auditors. Addtionally, these strict Requirements e and f. Discuss how each of the following stuations could affect independence of mind and independence in appearance, and evaluate the social consequence of Professional Conducr? Which are prohibited by the Sarbanes-Codey Act or the SEC? mUser may perceive the possiblility of complacency Complete the follcwing table by using these statements to evauiste how esch situation could affect independence of mind and independence in appearance, and the social AICPA Code of Professional Conduct or the Sarbanes-Odey Act and SEC. (Complete all answer boxes. Each statement may be used more than once or not at all) the n) Minor, if any o) It is costly for a new audit firm to obtain the knowledge because of confidentiality requirements and communication difficutes between CPA 1ims P) It may be less expensive for this work to be done by the auditor. )Management s in the best postion to evaluate the efectiveness and cost of alternative Prohibited by Social Code of of mind Print Done hoose from any drop-down list and then continue to the next