Auditor independence threats and malpractice claims
February 12, 2024
By Sarah Beckett Ference, CPA
All CPAs are expected to perform their professional responsibilities with the highest sense of integrity. Indeed, integrity is one of the hallmarks of the profession. In accordance with the AICPA Code of Professional Conduct (the Code), integrity requires CPAs “to observe the principles of objectivity and independence and of due care” (see paragraph .05 of ET sec. 0.300.040, “Integrity”). The Code further states that CPAs in public practice “should be independent both in fact and appearance when providing auditing and other attestation services” (see paragraph .01 of ET sec. 0.300.050, “Objectivity and Independence”).
Acting with integrity and complying with independence requirements may sound simple and straightforward, and there are many bright line rules enumerated in the Code’s independence standards to address specific situations, but the Code does not, and cannot, address and provide an answer for every situation. Circumstances can and will arise that require the CPA to apply judgment in evaluating compliance with these provisions of the Code.