Introduction to MIPPs Independence Rules

Question 1

Meaning of Independence?

Answer 1

Independence of the internal auditor or the external auditor from parties that may have a financial interest in the business being audited

Question 2

Members of Public Practice shall….

Answer 2

Be independent when performing attest (audit) work

Question 3

4 threats of Independence?

Answer 3

1 Financial relationships
2 Employment relationships
3 Family relationships
4 Consulting relationships

Question 4

Financial relationships threats?

Answer 4

An attest partner should not own stock in an audit client

Question 5

Employment relationships threats?

Answer 5

Attest partners should not be an audit clients board of directors

Question 6

Family relationships threats?

Answer 6

An attest partner should not audit a client whose CFO is a partner’s spouse

Question 7

Consulting relationships threats?

Answer 7

An attest firm should not provide internal audit services for an attest client

Question 8

Who is a covered member?

Answer 8

1 An individual on the attest engagement team
2 An individual in a position to influence the attest engagement (manager, owner)
3 Partner, Partner Equivalent or manager who provides more than 10-hrs of nonattest services within a fiscal year
4 A partner or partner equivalent
5 Firm