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Question - Megan Schmidt works for a Williams and Co, a smaller CPA firm that has a total of 11 professional staff members, including two partners. A financial statement attest client has requested the audit firm to prepare its depreciation schedule. Megan is a new staff member and will be responsible for this work. The client will have someone with suitable skills, knowledge and experience to oversee the preparation of the depreciation schedule. The audit firm has documented its understanding with the client including that the client will take responsibility for the depreciation schedule.
Required -
Identify the section in the AICPA Codification that addresses the independence issues associated with the case facts outlined above.
What are the threats to the independence of Williams and Co?
What safeguards can Williams and Co. put in place so that the firm's independence is not impaired?
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