Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

Which of the following roles can impair independence of an audit partner?

1. Having a family member employed as a consultant

2. Servicing as the audit engagement partner

3. Serving as a member of a board that oversees the client

4. Maintaining a distant professional relationship with the client

The correct answer is: Serving as a member of a board that oversees the client

Serving as a member of a board that oversees the client significantly impairs the independence of an audit partner. This role creates a direct financial interest or an advocacy threat, as the audit partner would be part of a management oversight body that has decision-making power over the client’s operations. This involvement can lead to a conflict of interest since the audit partner would need to exercise professional skepticism and objectivity over the same entity they are actively participating in governing. Independence is a fundamental principle for auditors, as they are required to remain free from any influences that could compromise their impartiality toward the audit client. When an audit partner has governance responsibilities that involve oversight and potentially influencing decisions, it contradicts the need for an impartial viewpoint required to deliver an objective audit opinion. While having a family member employed as a consultant may raise concerns about independence, it does not present as direct a conflict as being on a board. Likewise, simply serving as the audit engagement partner is understood as a standard role in the auditing process and maintaining a distant professional relationship does not typically impair independence if appropriate boundaries are maintained. Thus, the role on the board is the most critical factor in compromising the independence of an audit partner.