'He and His Firm' in the Context of Independence

AICPA Rule 101 describes factors that involve financial investments in clients and participation in the management of the client that would impair independence. Interpretation 101-9 expanded the applicability of restrictions and the meaning of the phrase "He and His Firm." This phrase incl...

Full description

Saved in:
Bibliographic Details
Published in:The CPA journal (1975) 1987-12, Vol.57 (12), p.44
Main Author: Bailey, Larry P
Format: Article
Language:English
Subjects:
Accountant independence
Accounting firms
Audit engagements
Auditors
Dependents
Ethics
Family
Partnerships
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:AICPA Rule 101 describes factors that involve financial investments in clients and participation in the management of the client that would impair independence. Interpretation 101-9 expanded the applicability of restrictions and the meaning of the phrase "He and His Firm." This phrase includes those individuals who perform engagements that require independence. The term "He and His firm" includes each owner of an accounting firm, while other definitions apply to those who are termed professional or managerial employees. Additionally, the phrase "He and His Firm" extends to another entity such as a partnership or corporation when certain employees can influence significantly the operating, financial, or accounting policies of the other entity. An individual's spouse and others dependent on the individual also are covered in that phrase, but nondependent close relatives are excluded. While the AICPA Code of Ethics establishes broad guidelines to determine ethical behavior, all situations must be examined to determine if an individual's independence has been impaired. Illustrations.
ISSN:0732-8435