Question

Assume that a CPA firm audits Snow-Town, Inc. Which of the following individuals is least likely to be considered a covered member as that term is used in the interpretations of the AICPA Code of Professional Conduct?

A. An auditor who is a staff accountant assigned to perform basic and routine audit functions on the Snow-Town, Inc. audit but has no managerial responsibilities in the audit firm.
B. An auditor who is a partner working out of a distant office of the firm who has provided five hours of consulting services to the client on a one-time engagement.
C. An auditor who is a partner in a distant office of the firm, does not participate in the Snow-Town, Inc. audit, but is assigned to perform the annual performance evaluations of the lead engagement partner.
D. An auditor who is a partner in the office in which the lead attest engagement partner primarily practices but is not assigned to the Snow-Town, Inc. audit engagement.

Answer 1

The least likely covered member is the staff accountant assigned to perform basic and routine audit functions on the Snow-Town, Inc. audit.

Step-by-step explanation:

According to the AICPA Code of Professional Conduct, a covered member is an individual who could influence the outcome of the audit or has direct or indirect financial interest in the client. Therefore, the individual least likely to be considered a covered member is option A, an auditor who is a staff accountant assigned to perform basic and routine audit functions on the Snow-Town, Inc. audit but has no managerial responsibilities in the audit firm. This is because the staff accountant does not have the authority or influence to affect the audit process or have any financial interest in the client.