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Unformatted text preview: 102271 542 Liyuan liu 2-17 a. First, it is a violation. I t violates the rule of Independence. Mario Danielli is the partner on the audit of the organization and at the same time he is a member for the board of directors. No matter the position is honorary or not, Mario Danielli is not independent from the organization. The advocacy threat and familiarity threat both possibly can be exist. Even if Mario can be independent in fact, but independence in appearance still can not be satisfied. The users potentially could believe Mario to be advocates for the organization so that most of the benefit of the audit function will be lost. Rationale for independence : Independence in auditing means taking an unbiased viewpoint in the performance of audit tests, the evaluation of the results, and the issuance of the auditor’s report. And the reason that many diverse users are willing to rely upon the professional public accountant’s reports as to the fairness of financial statements is their expectation of an unbiased viewpoint....
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This note was uploaded on 10/22/2009 for the course ACCT 70360 taught by Professor Pathak during the Spring '09 term at Windsor.
- Spring '09