Auditing & Assurance Services (Auditing and Assurance Services)
7th Edition
ISBN: 9781259573286
Author: Timothy J Louwers, Allen Blay, David Sinason Associate Professor, Jerry R Strawser, Jay C. Thibodeau Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter C5, Problem 1DQ
To determine
Indicate whether the professional standards permit the auditors of a company to provide tax services and retain their independence and objectivity.
Expert Solution & Answer
Explanation of Solution
As per the professional standards, the auditors can provide tax services to their clients but are prohibited from management responsibilities like operating decisions that affect the tax planning of the client. In addition, the auditors can act as an advocate to the taxpayer (client). But this responsibility would spill beans over the auditing responsibilities of the auditor, and the auditor cannot retain independence.
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Chapter C5 Solutions
Auditing & Assurance Services (Auditing and Assurance Services)
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