M8 Ethical and independence requirements

Question 1

What is the max prison time for individuals who alter, destroy, mutilate, conceal, cover up, falsify, or make false entry’s with the intent to impede, obstruct or influence an investigation

Answer 1

20 years

Question 2

What is the max prison time for Auditors who fail to retain all audit and review workpapers for 7 years

Answer 2

10 years

Question 3

Are tax services permissible when auditing a client

Answer 3

Yes, but they must be preapproved by the audit committee

Question 4

Firms that audit more than 100 issuers per year

Answer 4

Annual inspections by the PCAOB

Question 5

Firms that audit 100 issuers or fewer per year

Answer 5

inspection at least once every three years

Question 6

In what case will investments or other financial interest in an audit client not impair independence

Answer 6

1. Financial interest is received through an unsolicited gift or inheritance and is disposed of as soon as practicable, no later than 30 days after the person has knowledge of and right to dispose of financial interest.
2. If they dispose of financial interest at the earlier of
   The signing of the initial engagement letter or other agreements to provide services or
   The commencement of any audit, review, or attestation services