19-28

a- independence
An auditor is permitted to offer the advising services in accordance with Rule 101 of the
AICPA's Code of Professional Conduct. The client is a private organisation, as well. Due to
the nature of the engagement advisory in nature the auditor's independence will not be
viewed as having been compromised. No offence has been committed by Julia Roberto.
b- independence
According to Rule 101 of the AICPA's Code of Professional Conduct, an auditor is permitted
to make all important management decisions regarding the hiring of new employees and the
supervision of the audit firm's current employees. The auditor is also not allowed to perform
any supervisory duties. According to rule 101, Steve Rackwill's independence is not deemed
to be compromised in the current situation.
c- impaired
Jock Kraemeer had a significant stake in this situation prior to proposing Garvin Clothiers'
engagement. But after winning the engagement bid, the auditor transferred Garvin Clothiers'
shares into a blind trust. Because Jock Kraemer would ultimately be the beneficial owner of
the investment made after withdrawing from the trust, there is a definite loss of auditor
independence in this instance. Rule 101 of the AICPA Code of Professional Conduct states
that an auditor's independence will be compromised if they have a direct financial interest in
the client.
d-impaired
Zeker's parents have a significant financial stake in the client in the current case. As a result,
the auditor's independence is compromised. Followed by rule 101 of the AICPA Code of
Professional Conduct states that an auditor's independence will be compromised if their
parents have a financial stake in the entity being audited.
e - impaired
Dallas Conduit gave Jimmy Saad, the auditor, shares of its stock in exchange for the
payment of the audit fee prior to the start of his work planning. By applying the rule, this
compromises independence and integrity.
f- impaired
Any direct or indirect financial incentives from the client to the auditor are forbidden under
Rule 101 of the AICPA Code of Professional Conduct. In this instance, Allen got a note from
Dip-it Paint Corporation for work done on tax-related things two years ago. This lead to lack
of objectivity and independence.