The "CPA Independence Checklist" streamlines ongoing compliance, auditor independence maintenance, and handling of potential impairments professionally.
1
Review and understand professional standards regarding auditor independence
2
Establish and maintain independence policies and procedures internally
3
Identify and classify relationships that may impair independence
4
Analyze financial relationships with the client such as investments or loans
5
Examine employment relationships between the client and the CPA firm
6
Verify CPA’s compliance with the firm’s independence policies
7
Determine any improprieties in professional behavior or impairments to independence
8
Approval: Review of Independence Findings
9
Prepare and maintain documentation of independence considerations
10
Analyze impact of new business relationships on independence
11
Routinely confirm ongoing compliance with independence standards
12
Determine need for withdrawal from engagement if independence is impaired
13
Approval: Withdrawal Decision
14
Communicate independence considerations with the client if necessary
15
Implement post-engagement actions if independence was impaired
16
Review and update independence policies and procedures as needed
Review and understand professional standards regarding auditor independence
In this task, you will review and familiarize yourself with the professional standards relating to auditor independence. You need to understand the importance of independence and its impact on the overall auditing process. By the end of this task, you should have a clear understanding of the guidelines and requirements for maintaining auditor independence.
Establish and maintain independence policies and procedures internally
This task involves establishing and maintaining independence policies and procedures within your CPA firm. These policies ensure that all members of the firm are aware of the expectations and requirements for maintaining independence. By the end of this task, you should have a documented set of independence policies and procedures in place.
Identify and classify relationships that may impair independence
In this task, you will identify and classify relationships that may impair independence. It is important to recognize and understand the various relationships that could potentially compromise the independence of an auditor. By the end of this task, you should have identified any relationships that may pose a threat to independence and categorized them accordingly.
1
Yes
2
No
Analyze financial relationships with the client such as investments or loans
This task involves analyzing the financial relationships between the CPA firm and the client, such as investments or loans. You need to thoroughly examine these relationships to determine if they could potentially compromise independence. By the end of this task, you should have a clear understanding of any financial relationships that may impact independence.
1
Yes
2
No
Examine employment relationships between the client and the CPA firm
In this task, you will examine the employment relationships between the client and the CPA firm. It is crucial to evaluate these relationships to ensure that they do not compromise independence. By the end of this task, you should have a thorough understanding of any employment relationships that may impact independence.
Verify CPA’s compliance with the firm’s independence policies
This task involves verifying the CPA's compliance with the firm's independence policies. You need to ensure that all CPAs within the firm are adhering to the established independence policies and procedures. By the end of this task, you should have confirmed that the CPA is in compliance with the firm's independence policies.
Determine any improprieties in professional behavior or impairments to independence
In this task, you will determine if there are any improprieties in professional behavior or impairments to independence. It is important to identify any instances where independence may have been compromised. By the end of this task, you should have assessed the professional behavior of the CPA and identified any impairments to independence.
Approval: Review of Independence Findings
Prepare and maintain documentation of independence considerations
This task involves preparing and maintaining documentation of independence considerations. It is essential to keep thorough records of any independence-related assessments and decisions made. By the end of this task, you should have documented all independence considerations in a clear and organized manner.
Analyze impact of new business relationships on independence
In this task, you will analyze the impact of new business relationships on independence. It is crucial to evaluate the potential effects of new relationships to ensure that independence is not compromised. By the end of this task, you should have assessed the impact of any new business relationships on independence.
1
Yes
2
No
Routinely confirm ongoing compliance with independence standards
This task involves routinely confirming ongoing compliance with independence standards. It is important to regularly assess whether the CPA and the firm are maintaining independence as required by professional standards. By the end of this task, you should have confirmed ongoing compliance with independence standards.
Determine need for withdrawal from engagement if independence is impaired
In this task, you will determine the need for withdrawal from an engagement if independence is impaired. If independence has been compromised to a significant extent, it may be necessary to withdraw from the engagement. By the end of this task, you should have assessed the severity of the independence impairment and determined if withdrawal is necessary.
1
Yes
2
No
Approval: Withdrawal Decision
Will be submitted for approval:
Determine need for withdrawal from engagement if independence is impaired
Will be submitted
Communicate independence considerations with the client if necessary
This task involves communicating independence considerations with the client if necessary. If there are any independence-related concerns or impairments, it is essential to discuss them with the client in a clear and transparent manner. By the end of this task, you should have communicated independence considerations with the client if necessary.
Discussion about independence considerations
Implement post-engagement actions if independence was impaired
In this task, you will implement post-engagement actions if independence was impaired. If independence was compromised during the engagement, it is necessary to take appropriate actions to rectify the situation and prevent future occurrences. By the end of this task, you should have implemented any necessary post-engagement actions to address the impairment of independence.
Review and update independence policies and procedures as needed
This task involves reviewing and updating the independence policies and procedures as needed. It is important to periodically assess and revise the policies to ensure they remain relevant and effective. By the end of this task, you should have reviewed and updated the independence policies and procedures as necessary.
