Question
Olsen & Alain, CPAs (O&A) performed the audit of Rocky Point Brewery (RPB), a public company in 20X1 and 20X2. In 20X2, O&A also performed
Olsen & Alain, CPAs (O&A) performed the audit of Rocky Point Brewery (RPB), a public company in 20X1 and 20X2. In 20X2, O&A also performed expert services in connection with pending litigation between RPB and another party. Which statement best describes how the expert services affected O&A's independence in 20X2 under SEC independence rules?
1. O&A was not independent unless management approved its expert services. 2. O&A was independent if the fee for the expert services did not exceed 5% of its revenues. 3. O&A was not independent because the firm was placed in a position of advocating RPB's position. 4. O&A was independent because RPB benefited from its expertise in the litigation.
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