Reference no: EM132839789

Problem 1: Posey, a member, provides bookkeeping services for Giant Construction, a sole owner company of ten employees. On a monthly basis the owner sends Posey copies of check stubs and bank statements so that Posey can reconcile Giant's bank account and maintain the company's general ledger. At the end of the year, Posey prepares a trial balance based on the company's general ledger balance and utilizes that trial balance to prepare Giant Construction's required business tax returns and also prepares the owner's personal tax returns. Which of the following, as they relate to the services provided by Posey to Giant Construction, would impair Posey's independence?

A) Preparation of the monthly bank reconciliation that identifies reconciling items that are not discussed or evaluated by the client.
B) Coding checks that were not coded by the client and posting them to the company's general ledger without discussing or obtaining approval for the account coding from the client
C) Neither a nor b would impair independence because these are relatively common situations encountered when providing bookkeeping services to clients
D) Both a and b would impair independence.