Answer—Independence would be considered to be impaired if a covered member accepts more than a token gift from a client, even with the knowledge of the member's firm.
What impairs independence of an auditor?
AICPA rules state that an accountant's independence will be impaired if the accountant: makes investment decisions on behalf of audit clients or otherwise has discretionary authority over an audit client's investments. executes a transaction to buy or sell an audit client's investment.
What impairs independence under the new information systems interpretation?
Independence is impaired if a client outsources an ongoing function, process, or activity to the practitioner because the practitioner would be in the position of assuming a management responsibility.
What is impairment to independence or objectivity?
Impairments to Independence and Objectivity An individual auditor's independence and/or objectivity may be impaired by an undisclosed conflict of interest with the client, by reviewing an activity for which they were previously responsible or by being unduly influenced by a personal friendship.
What is an example of a financial situation that would impair the independence of a covered member?
Direct financial interest will impair an covered member from independence regardless of its materiality. Examples of direct financial interests will include: Ownership in client stock. Financial interest in a trust when the member is a trustee.
Can a CPA accept a gift from a client?
It's perfectly reasonable to accept a gift, however you must first stop to consider whether the gift could be seen as inducement, and therefore likely to impair your independence as a professional accountant.