1.1. Independence Analysis (1/2 point each: 3 Points total)

1. Highlight those who are NOT independent (in fact and/or in appearance), disqualifying them from working on this audit.

2. In the EXPLANATION section, cite your reasons for disqualifying them.

Remember, some situations involve professional judgment, which may legitimately vary from CPA firm to CPA firm.

PART 2. Independence Literature (1 Point All or nothing)

Highlight the professional literature that applies to this independence assessment?

Part 1: Assembling an Audit Team Independence Case Analyses (Deloitte, 2010) You are Jennifer Long, an audit manager for the public accounting firm, Smith, Jones, & Long, LLP. You have been assigned to manage the audit of the public company, Original Financial Services, Inc. You have met with several potential audit team members. Your task is to determine which potential team members lack independence from original, making them ineligible to join the audit team. 1.1. Independence Analysis (1/2 point each: 3 Points total 1. Highlight those who are NOT independent (in fact and/or in appearance), disqualifying them from working on this audit. 2. In the EXPLANATION section, cite your reasons for disqualifying them. Remember, some situations involve professional judgment, which may legitimately vary from CPA firm to CPA firm. NOTE: Use the Highlighter function in the toolbar, above, to mark those who are NOT independent Potential Team Members 1.1. Leonard Ames Associate Credit card issued by Original with $12K balance on it Also has Original checking, savings, & overdraft accounts (checking savings approx. $114K overdraft balance $1,500) EXPLANATION: 1.2. Sonya Lee Sr. Associate 2 car loans with Originali total amount ($87K) is material to net worth; 2 years remain ng on both loans EXPLANATION: 1.3. Lucy Long Sr. Associate Auto insurance policy through Original affiliate (since June 20X1); Standard coverage l never filed a claim EXPLANATION