Question

An audited entity company has not paid its 2013 audit fees. According to the AICPA Code of Professional Conduct, for the auditor to be considered independent with respect to the 2014 audit, the 2013 audit fees must be paid before the

A. 2013 report is issued.
B. 2014 fieldwork is started.
C. 2014 report is issued.
D. 2015 fieldwork is started.

Answer 1

For auditor independence per AICPA guidelines, the 2013 audit fees should be paid before the issuance of the 2014 audit report.

Step-by-step explanation:

According to the AICPA Code of Professional Conduct, for an auditor to maintain independence with respect to an audit, all outstanding fees for any services provided to the audited entity should be paid before the report is issued. In this case, for the auditor to be considered independent for the 2014 audit, the 2013 audit fees must be paid before the 2014 report is issued. Therefore, the correct answer to the question is C. 2014 report is issued.