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Question 29 Levy & Levy, CPAs are, and have been for many years, the auditors of Ace Mfg. Co., a publicly held company whose financial statements are filed with the Securities and Exchange Commission. John Carlson the president and chief executive officer of First State Bank is a member of the Ace Mfg. Co. board of directors. This is his only connection with Ace Mig. Co. John Carlson has asked Levy & Levy, CPAs to prepare his and his wife's income tax returns. Marie Scribner, chief financial officer of Ace Mig. Co. has also asked Levy & Levy, CPAs to prepare her income tax returns. Under the Public Company Accounting Oversight Board rules which of the following statements is correct? CA) Levy & Levy, CPAs preparing the income tax returns for John Carlson will not cause them to lose their independence with Ace Mig. Co. However, preparing the income tax returns for Marie Scribner would cause Levy & Levy, CPAs to lose their independence with Ace Mig. Co. . O B) Levy & Levy, CPAs preparing income tax returns for John Carlson and for Marie Scribner would not cause Levy & Levy, CPAS to lose their independence with Ace Mig. Co. . C C) If Levy & Levy, CPAs prepares the income tax returns for John Carlson, they will not be independent of Ace Mig. Co. Similarly, preparing the income tax returns for Marie Scribner would cause Levy & Levy, CPAs to be not independent of Ace Mig. Co. . C D) If Levy & Levy, CPAs prepares the income tax returns for John Carlson, they will not be independent of Ace Mig. Co. However, preparing the income tax returns for Marie Scriber would not cause Levy & Levy, CPAs to lose their independence with Ace Mig. Co.

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